Question

The market for footballs is perfectly competitive. If all else is held constant and the price of leather decreases, we would expect that the equilibrium quantity of footballs would ________ and the equilibrium price would ________.

Answer 1

Answer:

RISE, and the equilibrium price would FALL

Explanation:

A decrease in the price of leather if all other factors are held constant will lead to an increase in the quantity of football produced since the amount initially used in producing a football has dropped. Therefore the equilibrium quantity of football will RISE. Also, an increase in the quantity of football will lead to a FALL in the price of each football because producers will tend to produce more football than the demand.