Figure 3-11 -In Figure 3-11,suppose D₁ and S₁ Indicate Initial Conditions in Indicate

question 307

Multiple Choice

Figure 3-11

-In Figure 3-11,suppose D₁ and S₁ indicate initial conditions in the market for kitchen cabinets.Which of the following would tend to cause the supply curve to shift from S₁ to S₂?

• A)the invention of "folding" plates and cups that take up substantially less storage space in the kitchen
• B)a decrease in consumer income
• C)a decrease in the price of wood,a resource used to produce kitchen cabinets
• D)an increase in the price of steel hinges,a resource used to produce kitchen cabinets

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Definitions:

Perfectly Elastic

A situation in economics where the quantity demanded or supplied changes infinitely in response to any change in price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at various prices.

Higher Price

An increase in the cost of a good or service, often reflecting factors like demand and supply changes, production costs, or market conditions.

Supply And Demand Theory

A basic economic principle that describes how the quantity of goods provided by producers and the quantity desired by consumers affect the market price and allocation of resources.