Figure 3.8

-Refer to Figure 3.8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A). If worms eat half the apple crop how will the market equilibrium point change?
A)The equilibrium point will move from A to B.
B)The equilibrium point will move from A to C.
C)There will be no change in the equilibrium point.
D)The equilibrium point will move from A to E.

Question

Figure 3.8
 
-Refer to Figure 3.8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A). If worms eat half the apple crop how will the market equilibrium point change?
A)The equilibrium point will move from A to B. 
B)The equilibrium point will move from A to C. 
C)There will be no change in the equilibrium point. 
D)The equilibrium point will move from A to E.

Quizplus · Accepted Answer

If worms eat half the apple crop, the supply of apples decreases, shifting the supply curve leftward from S₁ to S₂. This results in a new equilibrium at a higher price and lower quantity, moving the equilibrium point from A to B.

Figure 3.8 -Refer to Figure 3.8.The Graph in This Figure Illustrates an This