Following adjustments to a new equilibrium in a market, the market clearing price remains unchanged, but the equilibrium quantity is now lower. Which of the following could definitely have caused this outcome?
A. Demand and supply both decreased.
B. Demand increased, and supply decreased.
C. Demand decreased, and supply increased.
D. Demand and supply both increased.
Answer: A
You might also like to view...
One tenet of classical economics is that
A) the role of the government should be limited, since the market will always be self-correcting. B) the government should set a minimum wage slightly above the natural market equilibrium rate. C) the government should intervene whenever necessary to avoid any unemployment. D) wages and prices are "sticky downward."
Refer to the scenario above. If Ron has the right to listen to music at night, how much does his neighbor need to pay him to stop playing music?
A) Any amount above $5,000 B) Any amount below $3,000 C) Any amount between $3,000 and $5,000 D) Any amount between $5,000 and $8,000