Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?
A) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease.
B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease.
C) The price would decrease, the demand would increase, and the supply would decrease.
D) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease.
B
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Why is per-capita U.S. currency demand so large? Who is holding large amounts of U.S. currency and why are they doing so? Should U.S. policymakers be concerned about this? Why?
What will be an ideal response?
An increase in total revenue will result if
A) demand is inelastic and price decreases. B) demand is elastic and price decreases. C) demand is elastic and price increases. D) demand is unitary elastic and price increases.