What impact will a decrease in the supply of ball-point pens imported to the United States have on the domestic price of ball-point pens? Assume the pens are virtually identical regardless of country of origin.

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Quizplus · Accepted Answer

A decrease in supply will lead to an increase in price, as consumers will bid up the price in order to acquire the limited quantity of pens available. This is due to the law of supply and demand, which states that as the supply decreases, the price will increase, all else being equal.

What Impact Will a Decrease in the Supply of Ball-Point