GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A higher quantity and lower price
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A higher quantity and higher price
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A higher quantity and the same price
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All of the above
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Detailed explanation-1: -Answer and Explanation: Upward or rightward shift in demand curve will result in a new equilibrium which shows higher quantity but the price at new equilibrium may increase, decrease, or remain constant.
Detailed explanation-2: -The conditions for Equilibrium in Monopoly are the same as those under perfect competition. The marginal cost (MC) is equal to the marginal revenue (MR) and the MC curve cuts the MR curve from below.
Detailed explanation-3: -If a tax is imposed the demand curve shifts from D0 to D1. On the other hand, if a subsidy is paid to consumers of the monopolist’s product, the curve shifts from D1 to D0. ADVERTISEMENTS: If a per-unit tax is imposed the demand curve shifts to the left (downward) exactly by the amount of the tax.
Detailed explanation-4: -Changes in equilibrium occur when a change in one or more economic factors shift the supply or demand curve, thus shifting the point of intersection between the two curves. This translates into the new market equilibrium.