Figure 4-21

-Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for kitchen cabinets of an increase in the price of wood?

Question

Figure 4-21
 
-Refer to Figure 4-21.Which of the following movements would illustrate the effect in the market for kitchen cabinets of an increase in the price of wood?

Quizplus · Accepted Answer

The movement from point C to point D shows the effect of an increase in the price of wood in the market for kitchen cabinets. This is because the increase in the input cost leads to a decrease in supply, resulting in a shift of the supply curve to the left from S1 to S2. As a result, the equilibrium price increases from P1 to P2, and the equilibrium quantity decreases from Q1 to Q2.

Figure 4-21 -Refer to Figure 4-21.Which of the Following Movements Would Illustrate