Refer to the Graph Shown

question 20

Multiple Choice

Refer to the graph shown. If suppliers can restrict output from M to L, the price will:

• A)fall from PL to PM.
• B)fall from PM to PL.
• C)rise from PL to PM.
• D)rise from PM to PL.

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Definitions:

Complements

Goods that are often used together where an increase in the demand for one leads to an increase in the demand for the other.

Quantity Demanded

The specific amount of a good or service that consumers are willing and able to buy at a given price within a certain period of time.

Price Decrease

A reduction in the cost of goods or services, which can affect demand, supply, and economic equilibrium.

Determinant

A factor or condition that decisively affects the nature or outcome of something, often used in economics to discuss variables impacting demand, supply, or price.