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Suppose the Market for a Good Is Initially in Equilibrium

Question 159

Multiple Choice

Suppose the market for a good is initially in equilibrium. Which of the following is most likely to happen if supply increases by a smaller amount than the increase in demand?


A) The equilibrium price will fall, and the equilibrium quantity will rise.
B) The equilibrium price will rise, and the equilibrium quantity will fall.
C) Both the equilibrium price and equilibrium quantity will rise.
D) The equilibrium price will rise but the change in the equilibrium quantity is indeterminate.
E) Both the equilibrium price and equilibrium quantity will fall.

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