In the Figure Above,if Point "A" Represents the Original Equilibrium

question 284

Multiple Choice

In the figure above,if point "a" represents the original equilibrium and point "b" the new equilibrium,then

• A) there has been an increase in supply.
• B) there has been an increase in demand.
• C) there has been a change in the quantity supplied and no change in supply.
• D) Both answers B and C are correct.
• E) Both answers A and B are correct.

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Definitions:

Elastic Demand

A situation in economics where the quantity demanded of a good or service changes significantly as its price changes.

Many Substitutes

Refers to a situation where numerous alternative products or services are available for consumers, often leading to competitive markets.

Inelastic Demand Curve

A demand curve that shows a small change in quantity demanded despite large changes in price, indicating consumers' necessity or lack of substitutes.

Motor Vehicles

Wheeled vehicles that are motorized or mechanically propelled, used for transportation of people, goods, or both.