Use the figure below to answer the following questions. Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2,which represents the market for beans.If the price of peas,a substitute for beans and a substitute in production,rises,what is the new beans equilibrium,ceteris paribus?
A)2
B)3
C)9
D)4

Question

Use the figure below to answer the following questions.  Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2,which represents the market for beans.If the price of peas,a substitute for beans and a substitute in production,rises,what is the new beans equilibrium,ceteris paribus?
A)2 
B)3 
C)9 
D)4

Quizplus · Accepted Answer

When the price of peas, a substitute for beans, rises, the demand for beans increases as consumers switch to beans. Additionally, since peas are a substitute in production, producers may allocate more resources to peas, reducing the supply of beans. The new equilibrium is where the increased demand and decreased supply intersect, which is option E (7).

Use the Figure Below to Answer the Following Questions