Figure 4-15

-Recycling of newspapers has been undermined by its success.The supply of old papers, gathered diligently by those concerned with the environment, has increased dramatically, as has the number of firms that convert the material into recycled newsprint.The quantity demanded has remained relatively stable despite falling prices because newspapers consider recycled newsprint an inferior substitute for regular newsprint.Consequently, the price of recycled newsprint has fallen below the cost of production; recycling firms are going out of business; mountains of old newspapers are left behind.Which graph in Figure 4-15 best illustrates this situation?
A)1
B)2
C)3

Question

Figure 4-15
 
-Recycling of newspapers has been undermined by its success.The supply of old papers, gathered diligently by those concerned with the environment, has increased dramatically, as has the number of firms that convert the material into recycled newsprint.The quantity demanded has remained relatively stable despite falling prices because newspapers consider recycled newsprint an inferior substitute for regular newsprint.Consequently, the price of recycled newsprint has fallen below the cost of production; recycling firms are going out of business; mountains of old newspapers are left behind.Which graph in Figure 4-15 best illustrates this situation?
A)1 
B)2 
C)3

Quizplus · Accepted Answer

The correct answer is A because the graph shows that the supply of recycled newsprint has increased dramatically, while the demand has remained relatively stable. This has led to a fall in the price of recycled newsprint below the cost of production, causing recycling firms to go out of business and leaving mountains of old newspapers behind.

Figure 4-15 -Recycling of Newspapers Has Been Undermined by Its Success.The Supply