Author Question: If the price of hot dogs were to decrease, which of the following changes would we expect to occur ... (Read 13 times)

nevelica · **on:** Jun 30, 2018

If the price of hot dogs were to decrease, which of the following changes would we expect to occur in the hot dog bun market?
a. The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would increase.
b. The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would decrease.
c. The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would increase.
d. The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would decrease.
e. The equilibrium price of hot dog buns would stay the same and the quantity of hot dog buns sold would increase.

Question 2

When some benefits are received by those who are not involved in a private transaction, a negative externality occurs.
a. True
b. False
Indicate whether the statement is true or false