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. Resource prices in this market increase; at the same time, the consumer population declines as migration causes an outflow of population to other regions. What happens to the supply curve and/or demand curve? A) S₁ shifts to S₂ but then shifts back to S₁. D₁ remains at D₁. B) S₁ shifts to S₃ and D₁ shifts to D₂. C) S₁ shifts to S₂ and D₁ shifts to D₃. D) S₁shifts to S₂ and D₁ shifts to D₂.

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An increase in resource prices causes the supply curve to shift left from S1 to S2, indicating a decrease in supply. A decline in the consumer population causes the demand curve to shift left from D1 to D2, indicating a decrease in demand.

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