Asked by David Torrez on May 06, 2024
Verified
(Figure: Shifts in Demand and Supply II) Use Figure: Shifts in Demand and Supply II.The figure shows how supply and demand might shift in response to specific events.Suppose the birthrate decreases.Which panel BEST describes how this will affect the market for diapers?
A) Panel A
B) Panel B
C) Panel C
D) Panel D
Birthrate
The number of live births per thousand of the population per year.
Diapers
Absorbent items worn by infants and young children to contain their waste until they are potty trained.
- Determine the effect of intervening variables, external to the market, on the equilibrium of price and quantity.
- Understand the relationship between income changes and demand for normal and inferior goods.
Verified Answer
SD
Shelbie DunlapMay 13, 2024
Final Answer :
B
Explanation :
A decrease in birthrate represents a decrease in demand for diapers, shifting the demand curve to the left as shown in Panel B. This leads to a lower equilibrium price and quantity of diapers.
Learning Objectives
- Determine the effect of intervening variables, external to the market, on the equilibrium of price and quantity.
- Understand the relationship between income changes and demand for normal and inferior goods.
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