Which of the following would cause a decrease in both the price and quantity of a good exchanged?
A)A strike by production workers in the industry.
B)A subsidy to the industry from the government.
C)A decrease in advertising expenditures by the industry.
D)A decrease in the price of a complement good.

Question

Which of the following would cause a decrease in both the price and quantity of a good exchanged?
A)​A strike by production workers in the industry.
B)​A subsidy to the industry from the government.
C)​A decrease in advertising expenditures by the industry.
D)​A decrease in the price of a complement good.

Quizplus · Accepted Answer

A decrease in advertising expenditures by the industry would cause a decrease in demand, resulting in a decrease in both the price and quantity of the good exchanged. A strike by production workers in the industry would likely reduce the supply of the good, causing an increase in the price and decrease in the quantity. A subsidy to the industry from the government would increase the supply of the good, potentially causing a decrease in price and increase in quantity. A decrease in the price of a complement good would likely increase demand for the original good, resulting in an increase in quantity and potentially an increase or decrease in price depending on the elasticity of demand.

Which of the Following Would Cause a Decrease in Both