Question

Here are some facts about the relationship between three goods: Firm X produces a good that it sells to Firm Y. Firm Y produces a service and sells it to consumers. Firm Z produces a service that is similar to Firm Y, and they also sell to consumers. Firm Z has no relationship with Firm X. Firm X experiences an increase in the demand for its product. We can expect this to a. the price that it charges for its product. This change in the price of good X will cause the b. curve for good Y to c. . The change in the market for good Y will cause the price of good Y to d. . This change in the price of good Y will cause the e. for good Z to f. . Enter increase

Answer 1

Answer:

a. increase

b. supply

c. decrease

d. increase

e. demand

f. increase

Explanation:

An increase in demand will cause an increase in the equilibrium price and quantity of a good so (a) is increase.

Since a decrease in supply will cause an increase in the equilibrium price and a decrease in the equilibrium quantity of a good so (b) (c) and (d) are supply, decrease and increase respectively.

Also a change in demand will cause equilibrium price and output to change in the same direction. Therefore (e) and (f) are demand and increase respectively.