Use the figure below to answer the following question(s). Figure 3-8 -In Figure 3-8, if the initial demand and supply for soybeans were D₁ and S₁, how would a decrease in the cost of producing soybeans affect the market for soybeans? A) Demand would increase to D₂, price would increase to P₂, and the quantity would increase to S. B) Supply would increase to S₂, price would decrease to P₀, and the quantity would increase to S. C) Both demand and supply would increase so the price would remain at P₁, but the quantity would increase to T. D) None of the above would occur.

Question

Quizplus · Accepted Answer

A decrease in the cost of producing soybeans would lead to an increase in supply, shifting the supply curve to the right (to S₂), resulting in a lower equilibrium price (P₀) and a higher equilibrium quantity.

Use the Figure Below to Answer the Following Question(s)