Consider the market for bicycles which is initially in equilibrium. Suppose that the number of bicycle producers increases at the same time that the cost of labour decreases. Which of the following statements is true about the market for bicycles given this information   O a. The equilibrium price will decrease and the equilibrium quantity will increase   Ob. The equilibrium price will increase and the equilibrium quantity will decrease   Oc. The equilibrium price may increase, decrease or remain the same while the equilibrium quantity will increase   Od. The equilibrium quantity may increase, decrease or remain the same while the equilibrium price will decrease

Principles of Microeconomics
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ISBN:9781305156050
Author:N. Gregory Mankiw
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Chapter4: The Market Forces Of Supply And Demand
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Consider the market for bicycles which is initially in equilibrium. Suppose that the number of bicycle producers increases at the same time that the cost of labour decreases. Which of the following statements is true about the market for bicycles given this information

 

O a. The equilibrium price will decrease and the equilibrium quantity will increase

 

Ob. The equilibrium price will increase and the equilibrium quantity will decrease

 

Oc. The equilibrium price may increase, decrease or remain the same while the equilibrium quantity will increase

 

Od. The equilibrium quantity may increase, decrease or remain the same while the equilibrium price will decrease

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