Use the following to answer questions :
Figure: Shifts in Demand and Supply IV 
-(Figure: Shifts in Demand and Supply IV) Look at the figure Shifts in Demand and Supply IV. The figure shows how supply and demand might shift in response to specific events. Suppose the price of lumber falls dramatically. Which panel BEST describes how this will affect the market for new houses?
Definitions:
Residual Income
The amount of income that an individual or company retains after accounting for all costs and expenses.
Producer Price Index
An economic indicator that measures the average changes in prices received by domestic producers for their output.
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