Figure 4-7 -Refer to Figure 4-7. the Figure Above Represents the Market

question 332

Multiple Choice

Figure 4-7
-Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1, what changes in the market would result in an economically efficient output?

• A) The price would increase, the quantity supplied would increase, and the quantity demanded would decrease.
• B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase.
• C) The price would increase, the demand would increase, and the supply would decrease.
• D) The price would increase, quantity demanded would increase, and quantity supplied would decrease.

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing and able to supply at that price.

Price Of Corn

The cost at which corn is bought and sold in the market, influenced by factors like demand, supply, and agricultural conditions.

Supply Of Ethanol

Refers to the total quantity of ethanol available in the market for consumption and use, influenced by production, demand, and government policies.

Farmers Plant

The act of farmers sowing seeds in order to grow crops, which is a critical step in the agricultural production process.