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Question
According to a supply and demand model for apples, if the average household income decreases at the same time 10 apple orchards go out of business, one would expect the equilibrium
a. price of apples to increase and the equilibrium quantity of apples in the market to decrease.
b. price of apples to be indeterminate and the equilibrium quantity of apples in the market to increase.
c. quantity of apples in the market to be indeterminate and the equilibrium price of apples to increase.
d. quantity of apples in the market to decrease and the equilibrium price of apples to stay the same.
e. quantity of apples in the market to decrease and the equilibrium price of apples to be indeterminate.
Answer
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