Question

50 (01.02.03.04) f2s - introductory microeconomics assignment 2 (chapter 3) producers of electric pianos expect the population to increase and the number of firms producing and selling electric pianos to increase. how will the price of an electric piano and the quantity of electric pianos bought change? the price of an electric piano will ____ and the quantity of electric pianos bought will ____. a. fall; decrease b. either rise, fall, or remain the same; increase c. fall; increase d. rise; increase, decrease or remain the same

Explanation:

An increase in population will increase the demand for electric pianos. An increase in the number of firms producing electric pianos will increase the supply. When demand and supply both increase, the quantity bought will definitely increase. However, the change in price depends on the magnitudes of the shifts in demand and supply. If the increase in supply is greater than the increase in demand, price will fall; if the increase in demand is greater than the increase in supply, price will rise; if they increase by the same amount, price will remain the same.

Answer:

B. either rise, fall, or remain the same; increase