Refer to the Information Provided in Figure 4

question 10

Multiple Choice

Refer to the information provided in Figure 4.2 below to answer the questions that follow. Figure 4.2
-Refer to Figure 4.2. The market is initially in equilibrium at Point A and supply shifts from S1 to S2. Which of the following statements is true?

• A) Price will still serve as a rationing device causing quantity supplied to rise from 8 to 11 soft pretzels.
• B) There is no need for price to serve as a rationing device in this case because the new equilibrium quantity is higher than the original equilibrium quantity.
• C) Price will still serve as a rationing device causing quantity demanded to fall from 11 to 8 soft pretzels.
• D) The market cannot move to a new equilibrium until there is also a change in supply.

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Definitions:

Potential Impacts

Possible effects or outcomes that could arise as a result of a specific action, decision, or event.

Affecting Decisions

The impact on choices and judgements by emotional, psychological, and social factors.

Physical Harm

Injury or damage caused to a person's body.

Loss Of Investment

The decrease in the value of an investment below its initial purchase price.