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Figure: Shifts in Demand and Supply IV
-(Figure: Shifts in Demand and Supply IV)Use Figure: Shifts in Demand and Supply IV.The figure shows how supply and demand might shift in response to specific events.Suppose the price of lumber falls dramatically.Which panel BEST describes how this will affect the market for new houses?

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Use the following to answer questions:
Figure: Shifts in Demand and Supply IV 
-(Figure: Shifts in Demand and Supply IV)Use Figure: Shifts in Demand and Supply IV.The figure shows how supply and demand might shift in response to specific events.Suppose the price of lumber falls dramatically.Which panel BEST describes how this will affect the market for new houses?

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A dramatic fall in the price of lumber, a key input in house construction, would decrease production costs, leading to an increase in supply. Panel (c) shows a rightward shift in the supply curve, which best represents this scenario.

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