The Figure Given Below Represents the Equilibrium Price and Output

question 39

Multiple Choice

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals.
Figure 4.1

-Refer to Figure 4.1. The demand for Restaurant Meals shift in one direction while the demand for Delivery meals shift in another direction. This implies:

• A) the demand for Restaurant Meals increased while that for Delivery Meals decreased.
• B) the demand for Restaurant Meals decreased while that for Delivery Meals increased.
• C) the demand for Restaurant Meals increased while that for Delivery Meals increased.
• D) the demand for Restaurant Meals decreased while that for Delivery Meals decreased.
• E) the demand for Restaurant Meals and the demand for Delivery Meals adds up to 1.

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Definitions:

Midpoint Method

A technique used to calculate elasticity by taking the average of the starting and ending prices and quantities to determine percentage changes.

Income Elasticity of Demand

An indicator of the variability in a product's demand based on shifts in consumer income.

Price Elasticity of Supply

An indicator of the sensitivity of the amount of a product supplied to fluctuations in its price.

Price Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, indicating the producers' ability to adjust supply when prices change.