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What Is the Effect of a Reduction in the Price

Question 194

Multiple Choice

What is the effect of a reduction in the price of steel on the equilibrium price and quantity of automobiles?


A) Both equilibrium price and equilibrium quantity rise.
B) Both equilibrium price and equilibrium quantity fall.
C) Equilibrium price rises and equilibrium quantity falls.
D) Equilibrium price falls and equilibrium quantity rises.
E) Both equilibrium price and equilibrium quantity remain unchanged.

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