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Figure: Shifts in Demand and Supply II
-(Figure: Shifts in Demand and Supply II)Use Figure: Shifts in Demand and Supply II.The figure shows how supply and demand might shift in response to specific events.Suppose the birthrate decreases.Which panel BEST describes how this will affect the market for diapers?

Question

Use the following to answer questions:
Figure: Shifts in Demand and Supply II 
-(Figure: Shifts in Demand and Supply II)Use Figure: Shifts in Demand and Supply II.The figure shows how supply and demand might shift in response to specific events.Suppose the birthrate decreases.Which panel BEST describes how this will affect the market for diapers?

Quizplus · Accepted Answer

A decrease in birthrate would result in a decrease in demand for diapers. This would cause the demand curve to shift left, as shown in Panel (b), decreasing both the equilibrium price and quantity of diapers.

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