An increase in the equilibrium quantity of good X can be caused by
A)an increase the price of inputs utilized in producing good X.
B)an increase in the price of good X.
C)a technological improvement in the process of producing good X.
D)a reduction in the number of producers of good X.

Question

Quizplus · Accepted Answer

A technological improvement in the process of producing good X will reduce the cost of production, leading to an increase in supply. This will shift the supply curve to the right, resulting in an increase in the equilibrium quantity of good X, without affecting the price.

Option A is incorrect because an increase in the price of inputs will increase the cost of production, leading to a decrease in supply and a leftward shift of the supply curve. This will result in a lower equilibrium quantity at a higher price.

Option B is incorrect because an increase in the price of good X will cause a decrease in demand, resulting in a leftward shift of the demand curve. This will result in a lower equilibrium quantity and a higher price.

Option D is incorrect because a reduction in the number of producers of good X will decrease the supply, shifting the supply curve to the left. This will result in a lower equilibrium quantity at a higher price.

An Increase in the Equilibrium Quantity of Good X Can