(Figure: Interpreting Supply Shifts 3) When the supply shifts from S₀ to S₁, the equilibrium price changes from

Question

Quizplus · Accepted Answer

When the supply shifts from S₀ to S₁, it means that at each price level, there is an increase in supply. This causes the market price to decrease from $60 to $40 (as shown on the vertical axis), while the quantity supplied increases from 15 units to 20 units (as shown on the horizontal axis). Therefore, the correct answer is B.

(Figure: Interpreting Supply Shifts 3) When the Supply Shifts from S0

(Figure: Interpreting Supply Shifts 3) When the Supply Shifts from S₀