Author Question: The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and ... (Read 158 times)

kodithompson · **on:** Jun 29, 2018

The figure illustrates the demand for and supply for jeans. Suppose jeans are a normal good and people's incomes increase.

At the initial price of 50 for a pair of jeans, after the increase in income the quantity demanded is ________ than the equilibrium quantity and there is a ________ of jeans. A) greater; surplus
B) greater; shortage
C) less; surplus
D) less; shortage

Question 2

A firm with a fixed cost of 300 every month and variable cost of 200 every month decides to shut down. In such a situation it would lose:

A) 200 every month.
B) 300 every month.
C) 500 every month.
D) 0 every month.