The Following Graph Depicts the Market for Potatoes in West

question 44

Multiple Choice

The following graph depicts the market for potatoes in West Virginia. Assume there are similar markets for potatoes in all other U.S. states and that the potatoes sold in all states are identical. Further, assume potato sellers incur zero costs to transport potatoes between any U.S. states and that there are no other barriers to trade. Use this graph to answer the following question.
-Suppose the equilibrium price of a pound of potatoes in all U.S.states is initially $1.20.Which scenario could cause a shift in West Virginia from S₁ to S₂ as shown in the graph?

• A) Potato farmers in other states produce unusually large crops of potatoes,causing the price in those states to fall to $1.00.
• B) Potato farmers in other states produce unusually small crops of potatoes,causing the price in those states to rise to $1.50.
• C) Demand for potatoes increases in West Virginia,causing the price there to rise to $1.50.
• D) Demand for potatoes falls in other states,causing the price in those states to fall to $1.00.
• E) Demand for potatoes falls in West Virginia,causing the price there to fall to $1.00.