Exhibit 4-1 Supply and demand data $$\begin{array} { | c | c | c | }
\hline \text { Price } & \begin{array} { c }
\text { Quantity } \
\text { demanded }
\end{array} & \begin{array} { r }
\text { Quantity } \
\text { supplied }
\end{array} \
\hline \$ 1.00 & 500 & 50 \
1.50 & 450 & 150 \
2.00 & 400 & 250 \
2.50 & 300 & 300 \
3.00 & 150 & 350 \
\hline
\end{array}$$
-In Exhibit 4-1, suppose that a reduction in the price of an important input used to produce the good causes an increase in quantity supplied of 150 units at every price level. Assuming that demand does not change, the new equilibrium price will be:
A) $1.00.
B) $1.50.
C) $2.00.
D) $2.50.

Question

Exhibit 4-1 Supply and demand data $$\begin{array} { | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { demanded }
\end{array} & \begin{array} { r } 
\text { Quantity } \
\text { supplied }
\end{array} \
\hline \$ 1.00 & 500 & 50 \
1.50 & 450 & 150 \
2.00 & 400 & 250 \
2.50 & 300 & 300 \
3.00 & 150 & 350 \
\hline
\end{array}$$ ​
-In Exhibit 4-1, suppose that a reduction in the price of an important input used to produce the good causes an increase in quantity supplied of 150 units at every price level. Assuming that demand does not change, the new equilibrium price will be:
A) $1.00.
B) $1.50.
C) $2.00.
D) $2.50.

Quizplus · Accepted Answer

The new supply quantities will be 200, 300, 400, 450, and 500. The new equilibrium occurs where quantity demanded equals quantity supplied, which is at $2.00 with both being 400 units.

Exhibit 4-1 Supply and Demand Data ​ -In Exhibit 4-1, Suppose That a Reduction in the |

Exhibit 4-1 Supply and Demand Data
-In Exhibit 4-1, Suppose That a Reduction in the |