The supply and demand curves for a market are graphed below with price in dollars and quantity in thousands.

Question

Two intersecting lines are graphed. The horizontal axis labeled Quantity goes from 0 to 70 in increments of 10. The vertical axis labeled Price goes from 0 to 50 in increments of 10. A line with a negative slope is labeled D and a line with a positive slope is labeled S. The lines intersect at approximately left parenthesis 33.7 comma 30 right parenthesis. A horizontal dashed line extends from left parenthesis 0 comma 30 right parenthesis to the point of intersection.

Which of the following would result from an increase (shift in the right) in the supply curve?

(1 point)
Responses

a market equilibrium quantity greater than $30
a market equilibrium quantity greater than 30 dollars

a market equilibrium quantity less than $30a market equilibrium quantity less than 30 dollars

a market equilibrium price greater than $30a market equilibrium price greater than 30 dollars

a market equilibrium price less than $30

Answer 1

An increase (shift to the right) in the supply curve typically results in a lower equilibrium price and a higher equilibrium quantity.

Given the initial equilibrium point is approximately at (33.7, 30), when the supply curve shifts to the right:

1. The equilibrium price will decrease. Therefore, the new equilibrium price will be less than $30.
2. The equilibrium quantity will increase, leading to a quantity that will be greater than 33.7 (which is in thousands).

Thus, the correct response is:

a market equilibrium price less than $30.