Answer to Question #327456 in Economics for Enhle

Question

The market for good A is in equilibrium. Then the price of a substitute good decreases and, simultaneously, the price of an input used to make good A increases. The equilibrium price of good A will

a.

either increase, decrease, or stay the same, and the equilibrium quantity of good A will increase.

b.

either increase, decrease, or stay the same, and the equilibrium quantity of good A will decrease.

c.

increase and the equilibrium quantity of good A will either increase, decrease, or stay the same.

d.

decrease and the equilibrium quantity of good A will either increase, decrease, or stay the same.

Answer 1

b.

either increase, decrease, or stay the same, and the equilibrium quantity of good A will decrease.