-In the Above Figure, the Curve Labeled a Shifts Rightward

question 29

Multiple Choice

-In the above figure, the curve labeled A shifts rightward if

• A) the substitution effect occurs.
• B) expected future profits decrease.
• C) the quantity of money decreases.
• D) taxes decrease.

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where demand and supply are equal.

Equilibrium Price

The cost at which the amount of a product or service that consumers want to purchase matches the amount available, leading to equilibrium in the market.

Supply Decreases

A reduction in the amount of a product or service that is available for sale, often resulting in higher prices if demand remains the same.

Demand Increases

A situation in which the desire and willingness to purchase a good or service rises, often due to factors like income growth or preference changes.