Exhibit 39-7 -Refer to Exhibit 39-7.Let E₁ represent the initial equilibrium in the market for X.A combination of population growth and an increase in agricultural productivity will likely result in a new equilibrium at A) E₂. B) E₃. C) E₄. D) E₅. E) E₄ or E₅, depending on the extent of income elasticity of demand.

Question

Quizplus · Accepted Answer

Population growth increases demand, and increased agricultural productivity increases supply. The new equilibrium will be at a higher quantity and lower price than the initial equilibrium.

Exhibit 39-7 -Refer to Exhibit 39-7.Let E1 Represent the Initial Equilibrium in the Initial

Exhibit 39-7 -Refer to Exhibit 39-7.Let E₁ Represent the Initial Equilibrium in the Initial