An increase in costs associated with additional security measures taken by the airlines is most likely to lead to:
A)a decrease in equilibrium price and a decrease in equilibrium quantity.
B)a decrease in equilibrium price and an increase in equilibrium quantity.
C)an increase in equilibrium price and a decrease in equilibrium quantity.
D)an increase in equilibrium price and no change equilibrium quantity.

Question

An increase in costs associated with additional security measures taken by the airlines is most likely to lead to:
A)​a decrease in equilibrium price and a decrease in equilibrium quantity.
B)​a decrease in equilibrium price and an increase in equilibrium quantity.
C)​an increase in equilibrium price and a decrease in equilibrium quantity.
D)​an increase in equilibrium price and no change equilibrium quantity.

Quizplus · Accepted Answer

Additional security measures increase the cost of production for airlines, causing the supply curve to shift leftward. As a result, the equilibrium price will increase while the equilibrium quantity will decrease. This is illustrated by a movement up and left along the supply and demand curves, resulting in a new equilibrium point with a higher price and lower quantity.

An Increase in Costs Associated with Additional Security Measures Taken