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45. Assume declining profits in the market for internet service for several firms in the area to drop out of the market. All else constant, this would be cause the:
a. equilibrium price to decrease and equilibrium quality to increase.
b. equilibrium price to decrease and equilibrium quality to decrease.
c. equilibrium price and quality to decrease
d. equilibrium price and quality to increase
Expert Answer
Option D is correct, That is Equilibrium price and quality to increase, because due to drop out of the firms from market of internet service, there would be chance of increase in Demand that ultimately increases the equilibrium price and Therefore the quality.
