The market for digital watches is at its market equilibrium. Now the cost of producing a digital watch rises, and at the same time, the price is expected to fall next month. What is the effect on the equilibrium price and equilibrium quantity this month? This month, the equilibrium price of a digital watch ________ and the equilibrium quantity of digital watches ________. A. will rise; will decrease B. might rise, fall, or not change; will decrease C. will rise; might increase, decrease, or not change D. will fall; will increase
The market for digital watches is at its market equilibrium. Now the cost of producing a digital watch rises, and at the same time, the price is expected to fall next month. What is the effect on the equilibrium price and equilibrium quantity this month? This month, the equilibrium price of a digital watch ________ and the equilibrium quantity of digital watches ________. A. will rise; will decrease B. might rise, fall, or not change; will decrease C. will rise; might increase, decrease, or not change D. will fall; will increase
Chapter4: Demand, Supply, And Markets
Section: Chapter Questions
Problem 4.8P
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The market for digital watches is at its market equilibrium . Now the cost of producing a digital watch rises, and at the same time, the price is expected to fall next month. What is the effect on the equilibrium price and equilibrium quantity this month?
This month, the equilibrium price of a digital watch ________ and the equilibrium quantity of digital watches ________.
A.
will rise; will decrease
B.
might rise, fall, or not change; will decrease
C.
will rise; might increase, decrease, or not change
D.
will fall; will increase
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