Refer to the accompanying diagram.Which of the following scenarios would explain this change in equilibrium?

A) A number of firms left the market.
B) A number of buyers entered the market,and a number of firms entered the market.
C) The price of a complement of this good increased.
D) The price of a substitute of this good increased.
E) The price of this good decreased.

Question

Refer to the accompanying diagram.Which of the following scenarios would explain this change in equilibrium?

A) A number of firms left the market. 
B) A number of buyers entered the market,and a number of firms entered the market. 
C) The price of a complement of this good increased. 
D) The price of a substitute of this good increased. 
E) The price of this good decreased.

Quizplus · Accepted Answer

An increase in the price of a substitute good would cause consumers to switch to the original good, leading to an increase in demand and an increase in equilibrium price and quantity.

Refer to the Accompanying Diagram