Suppose the marginal cost of producing an economics textbook is $20, no matter what quantity is produced. Initially, the market is in equilibrium. How will the equilibrium price and quantity be affected if there is a decrease in demand?
( Hint: remember that the marginal cost curve is the supply curve)
A) Price and quantity decrease
B) Price is unchanged. Quantity decreases
C) Price decreases. The effect on quantity is ambiguous
D) The effect on price is ambiguous. Quantity decreases