Author Question: An increase in the supply of oranges in a town drives down its price by 5 percent. Which of the ... (Read 79 times)

Kthamas · **on:** Jun 30, 2018

An increase in the supply of oranges in a town drives down its price by 5 percent. Which of the following changes will be observed in the market?
a. The demand for oranges will decrease.
b. The demand for oranges will increase.
c. The quantity of oranges demanded will increase.
d. The quantity of oranges demanded will decrease.

Question 2

If barriers to entry exist in the market for a product, then:
a. the costs of entry and exit are relatively low.
b. there will be few close substitutes of the product in the market.
c. firms will be incurring losses in both the short run and the long run.
d. firms will tend to have relatively less monopoly power.
e. the existing firms will quit the market in the long run due to mounting losses.