Use the following to answer question(s): Demand and Supply Shifters

-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose the price of lumber falls dramatically.Which panel best describes how this will affect the market for houses?

Question

Use the following to answer question(s): Demand and Supply Shifters
 
-(Exhibit: Demand and Supply Shifters) The exhibit shows how supply and demand might shift in response to specific events.Suppose the price of lumber falls dramatically.Which panel best describes how this will affect the market for houses?

Quizplus · Accepted Answer

A decrease in the price of lumber, a key input in house construction, would decrease the cost of building houses. This would likely increase the supply of houses as it becomes cheaper for builders to produce them, shifting the supply curve to the right, as depicted in Panel (c). Demand remains unchanged in this scenario.

Use the Following to Answer Question(s): Demand and Supply Shifters