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:

Proposed Project

A plan or proposal for a course of action, especially in a business or scientific context.

Fixed Costs

Costs that do not fluctuate with changes in production volume or sales, such as rent, salaries, and insurance.

Production

The process of creating, manufacturing, or enhancing products for sale.