Multiple choice

If both the supply and the demand show good increase, the market price will ____________.

  1. rise only in the case of an inelastic supply function

  2. fall only in the case of an inelastic supply function

  3. not be predictable with only these facts

  4. rise only in the case of an inelastic demand function

  5. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This is correct answer, because without additional information about the extent of the change, the effect on price is not determinable.

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