FIGURE 4-4

-Refer to Figure 4-4. Starting with initial curves D₀ and S₀, which movement is consistent with a decrease in both demand and supply?

Question

FIGURE 4-4
 
-Refer to Figure 4-4. Starting with initial curves D₀ and S₀, which movement is consistent with a decrease in both demand and supply?

Quizplus · Accepted Answer

Moving from Point A to Point E is consistent with a decrease in both demand and supply. This is because the quantity demanded and supplied decreases, as indicated by the movement along the curves from D₀ and S₀ to D₁ and S₁. Additionally, the equilibrium price decreases, indicating that both demand and supply have decreased. The other answer choices involve movements that are inconsistent with a decrease in both demand and supply, as they either involve an increase in one or both of these factors.

FIGURE 4-4 -Refer to Figure 4-4. Starting with Initial Curves D₀ and Initial