In the figure given below D1 and S1 are the original demand and supply curves.
Figure 3.1

-Refer to Figure 3.1. Given D1, if supply moves from S1 to S2 it implies:
A) quantity supplied has increased.
B) demand will decrease from B to A.
C) a surplus will exist equal to AB.
D) supply has decreased, and equilibrium price and equilibrium quantity will move to G and B respectively.
E) supply has decreased, and equilibrium price and equilibrium quantity will move to E and A respectively.
Correct Answer:
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