Figure: Supply-Driven Price Change Refer to the Figure

question 159

Multiple Choice

Figure: Supply-Driven Price Change Refer to the figure. When the supply curve shifts from S₀ to S₁, the equilibrium price rises to:

• A) $12 and the equilibrium quantity falls to 70.
• B) $10 and the equilibrium quantity falls to 100.
• C) $12 and the equilibrium quantity falls to 40.
• D) $10 and the equilibrium quantity falls to 70.

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Definitions:

Penalty

A punishment imposed for breaking a law, rule, or contract, which often involves paying a fine or forfeiting something.

Mark-Up

The amount added to the cost of a product or service to cover overhead and profit.

Selling Price

The amount of money for which a product is sold to the customer, after accounting for discounts, rebates, and other adjustments.

Payment

The transfer of money, or its equivalent, from one party to another in exchange for goods, services, or to fulfill a legal obligation.