Which of the following is most likely to occur when a competitive market moves from one equilibrium to another?

ANSWER CHOICES:

A)An increase in demand lowers the equilibrium price and increases the equilibrium quantity.

B) An increase in supply lowers the equilibrium price, quantity, and producer surplus.

C)A decrease in demand and increase in supply causes equilibrium price to increase but makes equilibrium quantity indeterminate.

D) A decrease in demand decreases equilibrium price, quantity, and producer surplus.

E) An increase in supply increases the equilibrium price and quantity and lowers producer surplus.

An increase in equilibrium price, equilibrium quantity, and producer surplus could be the result of

ANSWER CHOICES:

A)a decrease in supply

B)an increase in supply

C)a decrease in demand

D)an increase in demand

E)an increase in both supply and demand

When market equilibrium shifts, which of the following statements is true about the impact on economic surplus?

ANSWER CHOICES:

A)Its changes depend on the elasticities of supply and demand.

B)It will not be affected by market changes.

C)It is eliminated when the market is in balance.

D)Consumer surplus will change more than producer surplus.

E)Producer surplus will change, but consumer surplus is unaffected.

Which statement is true about a decrease, or leftward shift, in the market demand curve?

ANSWER CHOICES:

A)The more elastic the demand curve, the less of a reduction to consumer surplus.

B)The more elastic the demand curve, the greater the increase in total economic surplus.

C) It will automatically lead to a leftward shift in supply.

D) It will automatically lead to a rightward shift in supply.

E) It will increase the equilibrium quantity.

Use the graph to answer the question below.