The Table Below Displays Hypothetical Demand and Supply Schedules for the Market

question 59

Multiple Choice

The table below displays hypothetical demand and supply schedules for the market for overnight parcel deliveries in Canada.
TABLE 3-4
-Refer to Table 3-4.Which of the following statements best describes the change in equilibrium price and quantity in this market between Year 1 and Year 2?

• A)The demand curve has shifted to the left,the supply curve has shifted to the right; as a result equilibrium price is lower and equilibrium quantity is higher.
• B)The demand curve has shifted to the left,the supply curve has shifted to the left; as a result equilibrium price is higher and equilibrium quantity is lower.
• C)The demand curve has shifted to the right,the supply curve has shifted to the left; as a result equilibrium price is higher and equilibrium quantity is lower.
• D)The demand curve has shifted to the left,the supply curve has shifted to the right; as a result equilibrium price is higher and equilibrium quantity is lower.
• E)There is no change in equilibrium price or quantity from Year 1 to Year 2.

---

Definitions:

Substitutes

Goods or services that can be used in place of each other, where an increase in the price of one leads to an increased demand for the other.

Income Elasticity

A measure of how much the quantity demanded of a good changes in response to a change in consumers' income.

Demand Inelastic

When the quantity demanded of a good or service is relatively unchanged in response to price changes.

Directly Related

A situation where two variables move in the same direction, meaning if one increases, the other also increases and vice versa.