Suppose that the market for newspaper is initially in equilibrium. Further suppose that there is both an increase in the price of ink and a decrease in the price of magazines, which people may read in place of a newspaper. Which of the following accurately describes the new equilibrium?
A)The equilibrium price will rise; the equilibrium quantity is ambiguous.
B)The equilibrium price is ambiguous; the equilibrium quantity will fall.
C)The equilibrium price will fall; the equilibrium quantity is ambiguous.
D)The equilibrium price is ambiguous; the equilibrium quantity will rise.

Question

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The Answer of Suppose that the market for newspaper is initially in equilibrium. Further suppose that there is both an increase in the price of ink and a decrease in the price of magazines, which people may read in place of a newspaper. Which of the following accurately describes the new equilibrium?
A)The equilibrium price will rise; the equilibrium quantity is ambiguous.
B)The equilibrium price is ambiguous; the equilibrium quantity will fall.
C)The equilibrium price will fall; the equilibrium quantity is ambiguous.
D)The equilibrium price is ambiguous; the equilibrium quantity will rise.

Suppose That the Market for Newspaper Is Initially in Equilibrium