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 tacos.A new scientific study reveals that tacos cause bad breath.Simultaneously,the cost of producing tacos decreases.What is the new 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 tacos.A new scientific study reveals that tacos cause bad breath.Simultaneously,the cost of producing tacos decreases.What is the new equilibrium,ceteris paribus?
A)2 
B)3 
C)9 
D)4

Quizplus · Accepted Answer

The new scientific study revealing that tacos cause bad breath will decrease the demand for tacos, shifting the demand curve leftward. Simultaneously, the decrease in the cost of producing tacos will increase the supply of tacos, shifting the supply curve rightward. The new equilibrium point where the new supply and demand curves intersect is at point 4.

Use the Figure Below to Answer the Following Questions