Exhibit 39-6
-Refer to Exhibit 39-6.A major change in weather conditions favorable to the production of X will shift the supply curve for X from its original position.The consequent change in price and total revenue would be less sharp if the demand curve for X is __________ because it is __________ over the relevant region.

Question

Exhibit 39-6

-Refer to Exhibit 39-6.A major change in weather conditions favorable to the production of X will shift the supply curve for X from its original position.The consequent change in price and total revenue would be less sharp if the demand curve for X is __________ because it is __________ over the relevant region.

Quizplus · Accepted Answer

If the demand curve for X is more elastic, then a shift in the supply curve will result in a smaller change in price and a larger change in quantity, as consumers are more responsive to changes in price. Therefore, option C is the best choice. Options A and B are incorrect because they suggest that the original demand curve is more elastic than the other, which is not stated in the exhibit. Option D is incorrect because it suggests that the demand curve is less responsive to changes in price, which is counterintuitive.

Exhibit 39-6 -Refer to Exhibit 39-6.A Major Change in Weather Conditions Favorable