Exhibit 4-3  Supply and Demand Curves Initially the Market Shown

Exhibit 4-3  Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₂, Q₂ (E₂) . Changes in market conditions result in a new equilibrium at P₂, Q₄ (E₄) . This change is stated as a(n) :

A) increase in supply and an increase in demand.
B) increase in supply and a decrease in demand.
C) decrease in demand and a decrease in supply.
D) increase in demand with supply held constant at S₂.

Correct Answer:

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