Assume that the market for single family homes in southern California is initially in equilibrium. Then two events occur. First, a new study is published concluding that many firms in southern California are hiring workers for high-paying jobs. Second, there is a decrease in the cost of materials (inputs) used to build homes.

a

The equilibrium will be at C before the events and B after the events.

b

The equilibrium will be at B before the events and C after the events.

c

The equilibrium will be at A before the events and E after the events.

d

The equilibrium will be at E before the events and A after the events.