-In Figure 3-11,suppose that initially the market is in equilibrium as defined by the demand and supply curves D₁ and S₁.Which price/quantity combination could result from an increase in consumers' incomes coupled with an improvement in technology?

Question

-In Figure 3-11,suppose that initially the market is in equilibrium as defined by the demand and supply curves D<sub>1</sub> and S<sub>1</sub>.Which price/quantity combination could result from an increase in consumers' incomes coupled with an improvement in technology? A) $100 and 75,000 B) $100 and 100,000 C) $100 and 50,000 D) $120 and 75,000 E) $120 and 100,000

Quizplus · Accepted Answer

An increase in consumers' incomes would likely increase demand (shifting the demand curve to the right), while an improvement in technology typically increases supply (shifting the supply curve to the right). Both of these changes would result in a higher quantity being sold. The price effect could vary, but in this case, option B suggests a higher quantity without an increase in price, which aligns with the expected outcome of both demand and supply increasing.

-In Figure 3-11,suppose That Initially the Market Is in Equilibrium