Two events occur simultaneously in the market for automobiles: (1) an improvement in assembly line technology and (2) the economy enters a recession (which decreases consumers' income). An economist would predict with certainty that ____

Respuesta :

Answer:

An economist would predict with certainty that "equilibrium price will fall".

Explanation:

A state of market where market supply is equal to market demand thus understood as "market equilibrium". The price of equilibrium is the price of a good or service, if its supply is equal to the market demand for it.

A reduction in demand will trigger the price of the equilibrium to fall; the amount delivered will decrease. An increase in supply, unmodified for all other things, will provoke the price of equilibrium to fall; the amount requested will increase. While declining supply will cause the price of the equilibrium to rise; the demanded quantity will decrease.