Qualification > Commerce
ALL ECONOMICS DISCUSSION, PAPERS HELP HERE!!
Freaked12:
--- Quote from: aangel42 on June 10, 2010, 12:56:09 pm ---Due to good weather, there is a surplus in the market for an agricultural product.
Which change would cause the market to return to equilibrium?
A a decrease in demand
B a fall in price
C an increase in supply
D a rise in price
I know this is probably stupid, but this just doesn't make sense to me. I thought it would be a rise in price (D), because the supply curve moves to the right, which causes price to fall. BUT THAT'S WRONG (apparently). Why is the answer B???? >:(
--- End quote ---
It has to be Answer D
elemis:
Check it out ;D
@Freaked You are wrong !
J.Darren:
--- Quote from: Arsenal<3 on June 10, 2010, 01:03:22 pm ---It has to be Answer D
--- End quote ---
Due to good weather, there is a surplus in the market for an agricultural product.
Which change would cause the market to return to equilibrium?
Surplus - excess supply
A a decrease in demand would exacberate the surplus, hence A is incorrect.
B a fall in price would increase the demand, which would exacberate the surplus, hence B is incorrect.
C an increase in supply would exacberate the surplus, hence A is incorrect.
D a rise in price would reduce the demand, it is the correct answer.
An increase in price would result in reduction in demand and increase in supply, whereas a decrease in price would result in an increase in demand and decrease in supply.
rhea:
is electricity an example of fixed cost/variable cost?
rhea:
--- Quote from: J.Darren on June 10, 2010, 01:12:05 pm ---Due to good weather, there is a surplus in the market for an agricultural product.
Which change would cause the market to return to equilibrium?
Surplus - excess supply
A a decrease in demand would exacberate the surplus, hence A is incorrect.
B a fall in price would increase the demand, which would exacberate the surplus, hence B is incorrect.
C an increase in supply would exacberate the surplus, hence A is incorrect.
D a rise in price would reduce the demand, it is the correct answer.
An increase in price would result in reduction in demand and increase in supply, whereas a decrease in price would result in an increase in demand and decrease in supply.
--- End quote ---
um
D- surplus is excess supply which has to be USED UP by increasing the demand for the product.
u said it yourself, increases price, decreases the demand...creating the opposite effect of what is wanted.
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