Exhibit 4-2 Supply and demand curves

-The market shown in Exhibit 4-2 is initially in equilibrium at E₃.Changes in market conditions result in a new equilibrium at E₄.This change is stated as a/an:

Question

Exhibit 4-2 Supply and demand curves
 
-The market shown in Exhibit 4-2 is initially in equilibrium at E₃.Changes in market conditions result in a new equilibrium at E₄.This change is stated as a/an:

Quizplus · Accepted Answer

The new equilibrium point (E₄) shows an increase in both quantity demanded and quantity supplied, which indicates that there has been an increase in both supply (shift to the right) and demand (shift to the right). Therefore, the correct answer is E, "an increase in supply and an increase in quantity demanded."

Exhibit 4-2 Supply and Demand Curves