The Following Table Shows the Demand For, and Supply Of

question 106

Multiple Choice

The following table shows the demand for, and supply of, soya milk in a particular market (the quantities are in thousands of liters per day) :
$$\begin{array} { l l l } \begin{array} { c} \text { \$ Price } \\\text { per litre }\end{array} & \text { Demand } & \text { Supply } \\1.80 & 160 & 142 \\1.90 & 156 & 144 \\2.00 & 152 & 146 \\2.10 & 148 & 148 \\2.20 & 144 & 150 \\2.30 & 140 & 152 \\2.40 & 136 & 154\end{array}$$
-If the demand curve is upward-sloping, what would be the effect of an increase in supply?

• A) An increase in supply would be impossible.
• B) It will reduce both the price and the quantity traded.
• C) It will increase both the price and the quantity traded.
• D) It will increase the quantity traded but will reduce the price.
• E) It might or might not increase the price and quantity traded depending on the comparative slopes of the curves.

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