Use the following to answer questions: Figure: Demand, Supply Shifts -(Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D₁ and the initial supply curve is S₁. If this depicts the equilibrium in the market for computer printers, what will happen when the price of computers increases? A) There is not enough information to determine what will happen. B) D₁ will shift to D₂. C) D₁ will shift to D₃. D) S₁ will shift to S₃.

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Quizplus · Accepted Answer

An increase in the price of computers, which are complementary goods for computer printers, will result in a decrease in the demand for computer printers. This will cause the demand curve to shift leftward to D₂, resulting in a new equilibrium point with a lower quantity and price of computer printers. The supply curve is not affected by the change in the price of computers, so option D is incorrect. Option C is incorrect because the demand curve will not shift as far as D₃.

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