Which of the following will cause a decrease in market price? a. A decrease in the...

Which of the following will cause a decrease in market price?

a.

A decrease in the number of sellers of the good

b.

A technological improvement in the production of the good

c.

An increase in the cost inputs for production of the good

d.

The imposition of a binding price floor in the market

Expert Solution

The market price decreases when either the supply increases or the demand decreases.

a. A decrease in the number of sellers of the good results in a decrease in the supply of the good and hence, the market price should increase. Option a is incorrect.

b. A technological improvement in the production of the good increases the production capacity and thus results in an increase in the supply. Therefore, the market price should decrease. Option b is correct.

c. An increase in the cost of inputs of production of the good decreases the supply of the good. Therefore, the price should increase. Option C is incorrect.

d. The imposition of a binding price floor in the market - A binding price floor is above the equilibrium market price of a good. Therefore, the price of the good should increase. Option D is incorrect.

Ans: b. A technological improvement in the production of the good

Rahul Sunny answered 2 years ago

Which of the following would cause a decrease in the price of a good? a. an...

Which of the following would cause a decrease in the price of a good? a. an increasing shift in the demand for good and no shift in supply b. an increasing shift in the supply of a good and no shift in demand c. an increasing shift in the demand for good and a decreasing shift in supply d. a decreasing shift in the supply of a good and no shift in demand

Which of the following would most likely cause both a decrease in the price of McDonalds’...

Which of the following would most likely cause both a decrease in the price of McDonalds’ Big Mac hamburgers and a decrease in the number sold? a. an increase in the supply of McDonalds’ Big Mac hamburgers b. an increase in the demand for McDonalds’ Big Mac hamburgers c. a decrease in the supply of McDonalds’ Big Mac hamburgers d. a decrease in the demand for McDonalds’ Big Mac hamburgers

which of the following would cause a decrease in the velocity of money?

If demand is price inelastic, a decrease in price will cause a a. larger percentage increase...

If demand is price inelastic, a decrease in price will cause a a. larger percentage increase in quantity demanded than the percentage decrease in price, thereby decreasing total revenue. b. smaller percentage decrease in quantity demanded than the percentage decrease in price, thereby decreasing total revenue. c. smaller percentage decrease in quantity demanded than the percentage decrease in price, thereby increasing total revenue. d. larger percentage decrease in quantity demanded than the percentage decrease in price, thereby decreasing total revenue....

Question 4 Which of the following will cause the AD to decrease? A rise in consumer...

Question 4 Which of the following will cause the AD to decrease? A rise in consumer confidence A rise in business confidence A decline in government spending An increase in exports Question 5 If we assume that the supply of oil gets interrupted and as a result the price of oil doubles, what would that do in the short-run? The short-run aggregate supply function will decrease, causing the economy to experience a reduction in the level of output and a...

37. An increase in the price of Nike brand shoes will cause a decrease in the...

37. An increase in the price of Nike brand shoes will cause a decrease in the demand for Nike brand shoes. Group of answer choices True False 38. If a cartel is successful, the group of firms will _______ output, charge a price that is _______, and total revenue will increase if the good sold has _______ demand. Group of answer choices increase, higher, inelastic increase, lower, elastic decrease, higher, elastic decrease, lower, elastic decrease, higher, inelastic 39. The average...

Which of the following cause call and put option prices to rise? decrease in the underlying...

Which of the following cause call and put option prices to rise? decrease in the underlying stock price increase in the volatility of the underlying stock decline in the hedge ratio decrease in the time to expiration none.

Other things the same, which of the following is correct? a. A decrease in the price...

Other things the same, which of the following is correct? a. A decrease in the price level causes the dollar to appreciate. Aggregate demand shifts right. b. A decrease in the price level causes the dollar to depreciate. Aggregate demand shifts right. c. If speculators lose confidence in the American economy, the dollar appreciates. Aggregate demand shifts right. d. If speculators lose confidence in the American economy, the dollar depreciates. Aggregate demand shifts right.

A decrease in interest rates caused by a change in the price level would cause a(n):...

A decrease in interest rates caused by a change in the price level would cause a(n): A. Decrease (or shift left) in aggregate demand B. Increase (or shift right) in aggregate demand C. Decrease in the quantity of real output demanded (or movement up along AD) D. Increase in the quantity of real output demanded (or movement down along AD) 2. A decrease in expected returns on investment will most likely shift the AD curve to the: A. Right because...

Which of the following would be correct assuming that interest rates decrease? A. The price of...

Which of the following would be correct assuming that interest rates decrease? A. The price of a bond will decrease while the reinvestment income will increase. B. The price of a bond will decrease while the reinvestment income will decrease. C. The price of a bond will increase while the reinvestment income will decrease. D. The price of a bond will increase while the reinvestment income will increase. E. none of the above is correct. Which of the following is...

Question