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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.An increase in the price of a product that is a complement to X will:
A) decrease S,decrease P,and decrease Q.
B) decrease D,decrease P,and decrease Q.
C) increase D,increase P,and increase Q.
D) increase D,increase P,and decrease Q.
Complement
A good or service that is used together with another good or service, increasing the value of both.
Equilibrium Price
The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, achieving market balance.
Equilibrium Quantity
The quantity of goods or services that is supplied and demanded at the equilibrium price, where demand and supply are equal.
- Evaluate the effects of changes in the elements determining demand and supply on the state of market equilibrium.
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Learning Objectives
- Evaluate the effects of changes in the elements determining demand and supply on the state of market equilibrium.
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