If increases in government regulations have increased the cost of producing gasoline-powered lawnmowers, you accurately predict that in the market for gasoline-powered lawnmowers, there will be a(n)

A) decrease in the quantity supplied of gasoline-powered lawnmowers, a reduction in the price, and an increase in the quantity demanded.
B) decrease in the supply of gasoline-powered lawnmowers, an increase in the price, and a decrease in the quantity demanded.
C) decrease in the supply of gasoline-powered lawnmowers, an increase in the price, and a decrease in the demand.
D) increase in the supply of gasoline-powered lawnmowers, an increase in the price, and a decrease in the demand.

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Syairah Nasir · Accepted Answer

Final Answer : B, Explanation :  An increase in production costs due to government regulations would lead to a decrease in the supply of gasoline-powered lawnmowers. This decrease in supply would, according to the law of supply and demand, lead to an increase in the price of gasoline-powered lawnmowers. As the price increases, the quantity demanded by consumers would decrease, following the law of demand.

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