Figure 3-8
-Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S2 (point
A) A
B) B
B). f there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good), the equilibrium could move to which point?
C) C
D) E

Question

Figure 3-8 
-Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S2 (point
A) A 
B) B 
B). f there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good), the equilibrium could move to which point? 
C) C 
D) E

Quizplus · Accepted Answer

An increase in the number of companies producing motorcycles would shift the supply curve to the right (from S2 to S3), while a decrease in income would shift the demand curve to the left (from D1 to D2). The new equilibrium would occur at the intersection of D2 and S3, which is at point C.

Figure 3-8 -Refer to Figure 3-8. the Graph in This Figure Illustrates