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In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for,or supply (S) of,X; (2) the equilibrium price (P) of X;and (3) the equilibrium quantity (Q) of X. Refer to the given information.A reduction in the number of firms producing X will:
A) increase D,increase P,and increase Q.
B) increase S,decrease P,and increase Q.
C) decrease S,increase P,and decrease Q.
D) decrease S,decrease P,and increase Q.
Equilibrium Price
The price at which the quantity of a product demanded by consumers equals the quantity supplied by producers.
Equilibrium Quantity
The amount of goods or services supplied and demanded at the equilibrium price, where the quantity demanded equals the quantity supplied.
Number of Firms
The total count of businesses operating within a market or industry, a key factor in determining market structure and competition levels.
- Delve into the consequences of change in the fundamentals impacting demand and supply on market equilibrium.
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Learning Objectives
- Delve into the consequences of change in the fundamentals impacting demand and supply on market equilibrium.
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