Use the Figure Below to Answer the Following Question(s)

question 371

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 3-8

In Figure 3-8, if the initial demand and supply for soybeans were D ₁ and S ₁, how would a decrease in the cost of producing soybeans affect the market for soybeans?

• A) Demand would increase to D ₂, price would increase to P ₂, and the quantity would increase to S .
• B) Supply would increase to S ₂, price would decrease to P ₀, and the quantity would increase to S .
• C) Both demand and supply would increase so the price would remain at P ₁, but the quantity would increase to T .
• D) None of the above would occur.

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Definitions:

Owner's Equity

The residual interest in the assets of an enterprise after deducting its liabilities.

Assets

Resources owned or controlled by a company that are expected to provide economic benefits or value in the future.

Expenses

Costs incurred by a business in the process of earning revenue, such as salaries, rent, and utilities.

Assets

Resources owned or controlled by a company with expected future economic benefit.