-Refer to the diagram above.If the price in this market is initially $7.00 and it is then allowed to move to the equilibrium,does the quantity supplied increase or decrease,and by how much?
A) The quantity supplied decreases by 40 units.
B) The quantity supplied decreases by 20 units.
C) The quantity supplied remains unchanged.
D) The quantity supplied increases by 20 units.
E) The quantity supplied increases by 40 units.

Question

-Refer to the diagram above.If the price in this market is initially $7.00 and it is then allowed to move to the equilibrium,does the quantity supplied increase or decrease,and by how much?
A) The quantity supplied decreases by 40 units. 
B) The quantity supplied decreases by 20 units. 
C) The quantity supplied remains unchanged. 
D) The quantity supplied increases by 20 units. 
E) The quantity supplied increases by 40 units.

Quizplus · Accepted Answer

If the price is initially $7.00 and it moves to equilibrium, the quantity supplied decreases by 20 units as the market adjusts to the equilibrium price where supply equals demand.

-Refer to the Diagram Above