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In the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up : The equilibrium price will go down and equilibrium quantity will be indeterminate.
What is Equilibrium Price?
The Price at which the demand and supply equate to each other is called "Equilibrium" price.
If price falls then the demand rises. If price rises then the demand falls. On the other hand, if the price rises then the supply also rises by suppliers. If the price falls then the supply falls by suppliers or producers. When supply and demand of the market are equal then it is said to be "Equilibrium" . when the demand of the goods is equal to the supply of goods it is known as Equilibrium.
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. To determine the equilibrium price, you have to figure out at what price the demand and supply curves intersect.
Therefore, we can conclude that the correct option is B.
Your question is incomplete, but most probably your full question was:
What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?
A. the equilibrium price will go up and equilibrium quantity will be indeterminate
B. the equilibrium price will go down and equilibrium quantity will be indeterminate
C. the equilibrium price will be indeterminate and equilibrium quantity will go up
D. the equilibrium price will be indeterminate and equilibrium quantity will go down
E. the equilibrium price will go up and equilibrium quantity will go up
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