Referring to the previous question, what will happen to the equilibrium price and quantity of cars?
A) They will stay the same as domestic producers replace the cars once imported.
B) The shortage will cause the equilibrium price to increase and equilibrium quantity will decrease.
C) The surplus will cause equilibrium price to decrease and equilibrium quantity to increase.
D) The shift in the demand curve will cause equilibrium price to increase and quantity to increase.
ANSWER
B
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