TABLE 4-2

-Refer to Table 4-2. Suppose the supply schedule for Good A changes from S₁ to S₂ because the price of Good B increases. Based on this, what can we conclude?

Question

TABLE 4-2
 
-Refer to Table 4-2. Suppose the supply schedule for Good A changes from S₁ to S₂ because the price of Good B increases. Based on this, what can we conclude?

Quizplus · Accepted Answer

When the price of Good B increases and the supply of Good A increases (moving from S₁ to S₂), it suggests that producers are shifting resources from producing Good B to producing Good A. This behavior indicates that Goods A and B are likely substitutes in production, meaning that the same resources can be used to produce either Good A or Good B.

TABLE 4-2 -Refer to Table 4-2. Suppose the Supply Schedule for Good