D) surpluses are greater than shortages. Save Question 10 (1 point) Suppose, the
ID: 1139712 • Letter: D
Question
D) surpluses are greater than shortages. Save Question 10 (1 point) Suppose, the price of jet fuel has risen and consumer incomes have fallen. Which of the following will happen on the market for airline tickets as a result of the above factors? A) Equilibrium Q will decrease: equilibrium P will be indeterminate B) Equilibrium Q will be indeterminant; equilibrium P will decrease C) Equilibrium Q will be indeterminant: equilibrium P will increase D) Equilibrium Q will increase; equilibrium P will be indeterminate Save Question 11 (1 point)Explanation / Answer
answer:
as result fo rise in jet fuel price supply curve will shift to left and as a result of fall in consumer income demand curve will also shift to left ; however , the magnitude of their shift cannot be known.
It can happen that fall in supply is more than fall in demand in which case price will rise and qty. will fall; or fall in demand is more than fall in supply, in that case price and qty. both will fall; or supply and demand both fall by same amount , in that case price remain unchanged while qty. will fall.
hence the correct option is A i.e. equilibrium qty. will decrease while price will be indeterminate.
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