Figure 12-16

-Refer to Figure 12-16.Which panel best represents the perfectly competitive organic produce market in which firms are breaking even, economically, organic produce is considered a normal good, and the average income level of consumers is rising?

Question

Figure 12-16
 
-Refer to Figure 12-16.Which panel best represents the perfectly competitive organic produce market in which firms are breaking even, economically, organic produce is considered a normal good, and the average income level of consumers is rising?

Quizplus · Accepted Answer

Panel C shows that the demand curve is shifting to the right, which indicates that the average income level of consumers is rising. The supply curve is also shifting to the right, which indicates that the number of firms in the market is increasing. The equilibrium price and quantity are both increasing, which indicates that firms are breaking even, economically.

Figure 12-16 -Refer to Figure 12-16.Which Panel Best Represents the Perfectly Competitive