Assume the following occurs in a market: consumers expect a lower price; there is an increase...

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Assume the following occurs in a market: consumers expect a lower price; there is an increase...

Assume the following occurs in a market: consumers expect a lower price; there is an increase in the price of a complement; there is an increase in the number of firms; and there is decrease in government regulation. Which of the following correctly summarizes the outcome?

A. None of the choices shown is correct.

B. No predictions can be made with the information.

C. The equilibrium quantity will increase, but any change in the equilibrium price is uncertain.

D. The equilibrium price will decrease, but any change in the equilibrium quantity is uncertain.

E. The equilibrium price will decrease, but the equilibrium quantity will remain the same.

business economics

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Answer 1

Answer #1

Ans) the correct option is D. The equilibrium price will decrease, but any change in the equilibrium quantity is uncertain

The demand will decrease and supply will increase so change in equilibrium quantity is uncertain but equilibrium price will decrease

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Answer 2

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