A ban on the use of the technology used by most producers in an industry is likely to result in:
A) higher prices and a higher quantity exchanged in the industry.
B) higher prices and a lower quantity exchanged in the industry.
C) lower prices and a lower quantity exchanged in the industry.

Question

A ban on the use of the technology used by most producers in an industry is likely to result in: 
A) higher prices and a higher quantity exchanged in the industry.
B) higher prices and a lower quantity exchanged in the industry.
C) lower prices and a lower quantity exchanged in the industry.

Quizplus · Accepted Answer

If the technology used by most producers in an industry is banned, their production costs will increase, which will lead to higher prices. However, since the ban affects all producers, the supply of goods in the market will decrease, which will result in a lower quantity exchanged. Therefore, the correct answer is B, higher prices and a lower quantity exchanged in the industry.

A Ban on the Use of the Technology Used by Most