The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 Refer to Figure 4.1.Identify the impact on the price of Restaurant Meals and Delivery Meals following the direction of the shifts in demand in these two industries.
A)The price of Restaurant Meals rises while the price of Delivery Meals declines.
B)The price of both Restaurant Meals and Delivery Meals declines.
C)The price of Restaurant Meals declines while the price of Delivery Meals rises.
D)The price of both Restaurant Meals and Delivery Meals rises.
E)The price of Restaurant Meals and the price of Delivery Meals add up to $10.

Question

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1  Refer to Figure 4.1.Identify the impact on the price of Restaurant Meals and Delivery Meals following the direction of the shifts in demand in these two industries.
A)The price of Restaurant Meals rises while the price of Delivery Meals declines. 
B)The price of both Restaurant Meals and Delivery Meals declines. 
C)The price of Restaurant Meals declines while the price of Delivery Meals rises. 
D)The price of both Restaurant Meals and Delivery Meals rises. 
E)The price of Restaurant Meals and the price of Delivery Meals add up to $10.

Quizplus · Accepted Answer

From Figure 4.1, we can see that the shift in demand for Restaurant Meals is to the left, which means the demand has decreased. This leads to a decrease in the equilibrium price and output of Restaurant Meals. On the other hand, the shift in demand for Delivery Meals is to the right, which means the demand has increased. This leads to an increase in the equilibrium price and output of Delivery Meals. Therefore, the price of Restaurant Meals declines while the price of Delivery Meals rises.

The Figure Given Below Represents the Equilibrium Price and Output