Use the Following to Answer Questions

question 177

Multiple Choice

Use the following to answer questions:
Figure: Demand, Supply Shifts
-(Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D₁ and the initial supply curve is S₁. If technological innovations lower the costs of production, what will happen?

• A) D₁ will shift to D₃ and equilibrium price and equilibrium quantity will increase.
• B) S₁ will shift to S₂ and equilibrium price will increase but equilibrium quantity will decrease.
• C) D₁ will shift to D₂ and equilibrium price and equilibrium quantity will decrease.
• D) S₁ will shift to S₃ and equilibrium price will decrease but equilibrium quantity will increase.

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Definitions:

Proper Name

A specific reference to a unique individual, place, or thing, typically starting with a capital letter and used to give identity.

Limited Partnership's Property

Assets owned by a limited partnership, which are used for the partnership's business and may be subject to claims by creditors, separate from the personal assets of the partners.

Gift

Something given voluntarily without payment in return, as to show favor toward someone or honor an occasion.

Ownership Interest

A legal or equitable right, claim, or stake in property, giving the holder some degree of control or participation in the property's benefits, like income, or decision-making.