Refer to the Graph Below,showing the Market Supply and Demand

question 276

Multiple Choice

Refer to the graph below,showing the market supply and demand for a product.Assume that the market is initially in equilibrium where D₁ and S₁ intersect.If consumer incomes decreased and production costs increased,then new equilibrium would be at:

• A) P₁ and Q₃.
• B) P₂ and Q₂.
• C) P₃ and Q₁.
• D) P₄ and Q₂.

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Definitions:

Horizontal Shift

A movement of a graph in the left or right direction along the horizontal axis.

Vertical Shift

A transformation that moves a graph up or down the y-axis, changing the equation's output but not its input.

Vertical Line Test

A method to determine if a graph represents a function by checking if any vertical line intersects the graph at more than one point.