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 increases.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 increases.What is the new equilibrium,ceteris paribus?
A)2 
B)3 
C)9 
D)4

Quizplus · Accepted Answer

The new equilibrium is at point 2 because the demand for tacos decreases due to the new scientific study revealing that tacos cause bad breath, and the supply of tacos decreases due to the increased cost of production.

Use the Figure Below to Answer the Following Questions