Author Question: If the supply of a good decreased, what would be the effect on the equilibrium price and quantity? ... (Read 77 times)

Tirant22 · **on:** Jun 30, 2018

If the supply of a good decreased, what would be the effect on the equilibrium price and quantity?
a. Price would increase, and quantity would decrease.
b. Price would decrease, and quantity would decrease.
c. Price would increase, and quantity would increase.
d. Price would decrease, and quantity would increase.

Question 2

Over a ten year period, the monthly charge for cellular phone service decreased from 120 per month to 30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?
a. An increase in consumer income over this ten year period
b. A reduction in the price of residential phone service, a substitute for cellular phone service
c. An increase in the wages of workers in the cellular phone industry
d. Technological improvements that reduced the cost of supplying cellular phone service