Use the following graph of the bicycle market to answer the question below S, D,

Question

Use the following graph of the bicycle market to answer the question below S, D, D, 0 Quantity of Bicycles S1 and D1 are the original supply and demand curves. D2 and D3 and S2 and 53 are possible new demand and supply curves. Starting from the initial equlibrium (point 1, which point on the graph is most likely to be the new equilibrium after the introduction of technological improvements in bicycle production and successful publicity campaigns by the government on the virtues of bicycling to work? Multiple Choice

Explanation / Answer

Technological improvement will bring a shift in the supply curve to S2 as more quantity will be supplied. Due to successful brand campaigning the demand will also increase and the new demand curve would be D2.

The intersection of D2 and S2 would happen at point 5.

Hence option c) 5

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---