Refer to the Information Provided in Figure 4

question 31

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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