Resource X is necessary to the production of good Y.If the price of resource X falls,the equilibrium price of Y will ______________ and the equilibrium quantity of Y will ________________.
A) rise; rise
B) fall; fall
C) fall; rise
D) rise; fall

Question

Quizplus · Accepted Answer

When the price of a resource necessary for the production of a good falls, the cost of producing that good decreases. This typically leads to an increase in supply, which can lower the equilibrium price and increase the equilibrium quantity of the good in the market.

Resource X Is Necessary to the Production of Good Y