Consider the following perfectly competitive market for oranges: Qs = 5P Qd = 60 – 5P Now suppose that demand for oranges increases by 20 units at each price. After the increase in demand, which of the following is correct? Group of answer choices a The equilibrium price is unchanged, and the quantity traded increases by 20. b The equilibrium price increases by $2, and the quantity traded increases by 20. c The equilibrium price increases by $2, and the quantity traded increases by 10. d The equilibrium price increases to $8, and the quantity traded decreases to 40.
Consider the following perfectly competitive market for oranges: Qs = 5P Qd = 60 – 5P Now suppose that demand for oranges increases by 20 units at each price. After the increase in demand, which of the following is correct? Group of answer choices a The equilibrium price is unchanged, and the quantity traded increases by 20. b The equilibrium price increases by $2, and the quantity traded increases by 20. c The equilibrium price increases by $2, and the quantity traded increases by 10. d The equilibrium price increases to $8, and the quantity traded decreases to 40.
Chapter4: Markets In Action
Section: Chapter Questions
Problem 6SQ
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Question
Consider the following
Qs = 5P
Qd = 60 – 5P
Now suppose that demand for oranges increases by 20 units at each price. After the increase in demand, which of the following is correct?
Group of answer choices
a The
b The equilibrium price increases by $2, and the quantity traded increases by 20.
c The equilibrium price increases by $2, and the quantity traded increases by 10.
d The equilibrium price increases to $8, and the quantity traded decreases to 40.
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