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In Exhibit 3-11, in Panel A the movement from point A to point B describes a(n):
A. increase in demand and an increase in the quantity supplied.
B. increase in the quantity demanded and an increase in supply.
C. decrease in demand and a decrease in the quantity supplied.
D. decrease in the quantity demanded and a decrease in supply.
Answer: C
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A competitive price-searcher market is characterized by firms
a. being able to choose their price and by low barriers preventing firms from entering or leaving the market. b. being able to choose their price and by high barriers preventing firms from entering or leaving the market. c. having to accept the market price for their product and by high barriers preventing firms from entering or leaving the market. d. having to accept the market price for their product and by low barriers preventing firms from entering or leaving the market.
There are many wheat farmers in the world, and there are also many McDonald's restaurants in the world. Why, then, does a McDonald's restaurant face a downward-sloping demand curve while a wheat farmer faces a horizontal demand curve?
What will be an ideal response?