In the Following Figure, the First Panel Shows a Market

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S₁: Supply curve of automobiles prior to regulation
S₂: Supply curve of automobiles after regulation
FG: Clean up cost per unit
-During the recession witnessed in early 2001, many firms laid off their employees and downsized. The reason for this decrease in the demand for employees was:

A) a reduction in the demand for final goods.
B) a reduction in the prices of final goods.
C) an increase in the demand for final goods.
D) an increase in the prices of final goods.
E) the incompetency and poor performance of the employees.

Correct Answer:

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