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 E) Which of the following changes would cause the equilibrium to change to point A? A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples. B) An increase in the wages of apple workers and a decrease in the price of oranges, a substitute for apples. C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease. D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.

Question

Quizplus · Accepted Answer

According to the graph, a decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples would cause a shift in the supply curve from S₂ to SS0U1B12S0U1B0, resulting in a new equilibrium point at A. This is because a decrease in the wages of apple workers would increase the cost of production for apples, causing a decrease in the quantity supplied of apples, while an increase in the price of oranges would make them a more attractive substitute for apples, causing a decrease in the quantity demanded of apples.

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