Question

A decrease in input costs to firms in a market will result in a(n) _________________

a) decrease in equilibrium price and an increase in equilibrium quantity.
b) decrease in equilibrium price and a decrease in equilibrium quantity.
c) increase in equilibrium price and a decrease in equilibrium quantity.
d) increase in equilibrium price and an increase in equilibrium quantity.

Answer 1

A decrease in input costs to firms in a market will result in a decrease in equilibrium price and an increase in equilibrium quantity.

Step-by-step explanation:

A decrease in input costs to firms in a market will result in a decrease in equilibrium price and an increase in equilibrium quantity.

When input costs decrease, firms can produce goods and services at a lower cost. This allows them to lower their prices, leading to a decrease in the equilibrium price. Additionally, with lower costs, firms are able to supply more goods and services, resulting in an increase in the equilibrium quantity.

For example, if the cost of raw materials used in the production of a good decrease, the firm can lower the price of the good and produce more of it, leading to a decrease in equilibrium price and an increase in equilibrium quantity.

Answer 2

a) decrease in equilibrium price and an increase in equilibrium quantity.

Step-by-step explanation:

As the input cost decreases for the companies the the supply of the goods increases hence the supply curve shifts rightwards.In the curve at the new equilibrium point the equilibrium price decreases and the equilibrium quantity increases.

Think it like if cost of creating anything is decreased for a company then the company will create more products .So there will be more products in the market.So to clear the products in the market the price will be reduced and the quantity of the product is more than before.