Figure 2.1.1 -Refer to Figure 2.1.1 Above. Starting from Point A, How

question 80

Multiple Choice

Figure 2.1.1
-Refer to Figure 2.1.1 above. Starting from point A, how do the firms in the market react when the price of coffee increases from $6.00 to $7.50 per pound?

• A) The supply curve shifts to the right and the quantity supplied increases to 10 million pounds per year.
• B) The supply curve shifts from S1 to S2, but the market moves from A to B, so the quantity supplied increases to 9 million pounds per year.
• C) The market moves from A to B temporarily, but eventually will settle at point C, where the quantity supplied will be 10 million pounds.
• D) The supply curve does not shift, but the quantity supplied increases from 7 to 9 million pounds per year.

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