The accompanying supply-demand diagram shows the market for calculators.The initial price of calculators is P₀,and the initial quantity exchanged is Q₀. Which of the following situations could be correctly illustrated by the diagram?

Question

Quizplus · Accepted Answer

A decrease in the cost of memory chips used in calculators would shift the supply curve to the right, leading to a lower price (P2) and a higher quantity exchanged (Q2). This is represented in the diagram as a movement along the demand curve from point A to point B. Graphing capabilities and new features (choice A) would shift the demand curve to the right, increasing both price and quantity exchanged. The introduction of personal computerized notepads (choice C) would shift the demand curve to the left, decreasing both price and quantity exchanged. A heavy tariff on imported calculators (choice D) would not necessarily affect the supply or demand curve for calculators in the given market, as it only affects the price of imported calculators.

The Accompanying Supply-Demand Diagram Shows the Market for Calculators