PRC-3 · Chapter 10 · Question 16 of 70
A massive improvement in robotic automation significantly lowers the cost of manufacturing laptops. Simultaneously, laptops become a critical necessity for all school children, drastically increasing consumer desire. What happens to equilibrium?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Quantity definitely rises, Price is indeterminate
Explanation
Lower costs shift supply right (P down, Q up). Increased desire shift demand right (P up, Q up). Both increase Q, but push P in opposite directions. The net price change is indeterminate.
More Demand, Supply and Market Equilibrium MCQs
- Q18A cartel of oil-producing nations decides to artificially restrict the pumping of oil to half of the normal capacity. What is the…
- Q19If the government maintains a 'Buffer Stock' system for agricultural crops, what action does it take during a year of exceptional…
- Q20At the point where the downward-sloping demand curve intersects the upward-sloping supply curve, the market achieves a state where:
- Q21Because of a highly successful marketing campaign, coffee becomes the most popular beverage in the nation. Assuming the price of coffee…
- Q22If the market price of laptops drops from Rs. 80,000 to Rs. 60,000 during a massive sale, consumers will naturally buy more. What economic…