Figure 3-2
-Refer to Figure 3-2.A decrease in the number of firms in the market would be represented by a movement from
A)A to B.
B)B to A.
C)S1 to S2.
D)S2 to S1.

Question

Figure 3-2 
-Refer to Figure 3-2.A decrease in the number of firms in the market would be represented by a movement from
A)A to B. 
B)B to A. 
C)S1 to S2. 
D)S2 to S1.

Quizplus · Accepted Answer

A decrease in the number of firms would result in a decrease in supply (shift from S1 to S2) which would lead to an increase in price and quantity demanded. Therefore, the movement from S2 to S1 would represent a decrease in the number of firms in the market.

Figure 3-2 -Refer to Figure 3-2.A Decrease in the Number of Firms