If the price of film increases at the same time the cost of camera production increases,what will happen to the equilibrium price and quantity in the camera market?
A)Price will increase,quantity will decrease
B)Price will increase,quantity will increase
C)Price will decrease,quantity will decrease
D)Price will decrease,quantity will increase
E)The new equilibrium price and quantity can not be determined

Question

Quizplus · Accepted Answer

The increase in the price of film (a complement to cameras) would likely decrease the demand for cameras, pushing the equilibrium price and quantity of cameras down. However, the increase in the cost of camera production would decrease the supply of cameras, pushing the equilibrium price up and quantity down. These two effects work in opposite directions on quantity, making the overall impact on equilibrium price and quantity indeterminate without more information.

If the Price of Film Increases at the Same Time