Answer to Question #210023 in Economics for Sifiso Siboniso NA

Question

If at the same time there was a rent increase for food outlets on campus, then in comparison with the original equilibrium E, there would be

•  A. a decrease in equilibrium quantity but an indeterminate effect on price.
•  B. a decrease in equilibrium quantity but a price increase.
•  C. an increase in equilibrium quantity but a price decrease.
•  D. an increase in equilibrium price and quantity.

Answer 1

B. a decrease in equilibrium quantity but a price increase.