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 D₂ and S₂ (point

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 D₂ and S₂ (point

Quizplus · Accepted Answer

A decrease in the wages of apple workers would reduce production costs, shifting the supply curve to the right. An increase in the price of oranges, a substitute, would increase demand for apples, shifting the demand curve to the right. Both changes would move the equilibrium to point A.

Figure 3-8 -Refer to Figure 3-8.The Graph in This Figure Illustrates an This