-Refer to the graph above to answer this question.Which of the following statement is correct?
A)Both ab and ac represent a decrease in supply.
B)Both ab and ac represent a decrease in the quantity supplied.
C)While ac represents a decrease in supply,ab represents a decrease in demand.
D)While ac represents a decrease in supply,ab represents a decrease in the quantity demanded.

Question

-Refer to the graph above to answer this question.Which of the following statement is correct?
A)Both ab and ac represent a decrease in supply. 
B)Both ab and ac represent a decrease in the quantity supplied. 
C)While ac represents a decrease in supply,ab represents a decrease in demand. 
D)While ac represents a decrease in supply,ab represents a decrease in the quantity demanded.

Quizplus · Accepted Answer

The correct interpretation of shifts in supply and demand curves is crucial. A movement from a to b on the same curve typically indicates a change in the quantity demanded or supplied due to a price change, not a shift in the entire curve. A shift from a to c represents a change in supply, as it shows the curve moving to a new position, indicating factors other than price affecting supply.

-Refer to the Graph Above to Answer This Question