Question

assume declining profits in the market for internet services force several firms to drop out of the market. Which of the following best describes the effect of

Answer 1

• Option A: Quantity supplied would decrease, creating excess supply at the initial equilibrium price.
• Option F: Price would then rise, causing quantity demanded to decrease and quantity supplied to increase until a new equilibrium is reached.
• Option H: Price would then rise, causing quantity demanded to decrease and quantity supplied to increase until a new equilibrium is reached.

Explanation:

The inverse relationship between the desired quantity and the price of the commodity is "quantity required and quality." The product is going to fall and vice versa.

The result of the decrease in the number of service providers and the resulting market change on new equilibrium prices and amounts as best described: supply will decrease, resulting in excess supply at the original balance level.

Prices would then dynamically adjust the quantity produced and the amount provided would increase until a new balance is achieved.