An increase in the equilibrium quantity of good B can be caused by
A) an increase the price of inputs utilized in producing good B.
B) an increase in the price of good B.
C) a technological improvement in the process of producing good B.
D) a reduction in the number of producers of good B.

Question

Quizplus · Accepted Answer

A technological improvement in the process of producing good B would reduce the cost of production and increase the supply of good B, leading to a higher equilibrium quantity. Option A is incorrect since an increase in the price of inputs would increase the cost of production and reduce the supply of good B, leading to a lower equilibrium quantity. Option B is incorrect because an increase in the price of good B would reduce the quantity demanded, leading to a lower equilibrium quantity. Option D is incorrect since a reduction in the number of producers would decrease the supply of good B, leading to a lower equilibrium quantity.

An Increase in the Equilibrium Quantity of Good B Can