The figure shows the market demand curve for bread, together with original and new supply curves, where the curve has shifted due to an introduction of a new technology. Assume that the number of bakeries remains constant. Which one of the following statements is correct?
Image failed to load

Question

The figure shows the market demand curve for bread, together with original and new supply curves, where the curve has shifted due to an introduction of a new technology. Assume that the number of bakeries remains constant. Which one of the following statements is correct?

Image failed to load

Accepted Answer

The bakeries' marginal cost of production has fallen.

Answer

The more elastic the demand curve, the larger the fall in price.

Answer

Excess demand at the original price has led to the fall in the equilibrium price.

Answer

There has been an increase in demand.

Crowdly

The figure shows the market demand curve for bread, together with original and n...

Want instant access to all verified answers on learning.monash.edu?