You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X.Refer to the above.A reduction in the number of firms producing X will:

Question

Quizplus · Accepted Answer

A reduction in the number of firms producing X will decrease the supply of X. This will cause an increase in the equilibrium price of X and a decrease in the equilibrium quantity of X, as consumers will demand less at the higher price. Therefore, choice C is the only option that correctly identifies the effects of the reduction in the number of firms on D, P, and Q.

You Are Asked to Determine, Other Things Equal, the Effects