Figure: Supply and Demand 3 Which of the Following

question 96

Multiple Choice

Figure: Supply and Demand 3 Which of the following statements applies to the diagram?

• A) An increase in supply causes an increase in quantity demanded.
• B) A decrease in supply causes an increase in quantity demanded.
• C) An increase in supply causes an increase in demand.
• D) A decrease in supply causes a decrease in demand.

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Definitions:

Lowest Cost

The minimal expense incurred in the production or procurement of goods or services, under efficient conditions.

Output

The quantity of goods or services produced within a given time period.

Factor Prices

The costs of the inputs that are used in the production of goods or services.

Production Function

A mathematical relationship describing the maximum output possible from a given set of inputs.