Use the figure below to answer the following questions Figur

Use the figure below to answer the following question(s). Figure 3-13 Si Pi 1Fe 21 Quantity of Margarine 19. Refer to Figure 3-13. The market for margarine was initially in equilibrium at point e. Other things constant, a decrease in the price of butter, a close substitute for margarine, would likely move the equilibrium in this market toward point c. t d. u Refer to Figure 3-13. The market for margarine was initially in equilibrium at point e. Other things constant, an increase in the price of soybean oil, an important ingredient used to produce margarine, would likely move the equilibrium in this market toward point a. r 20. d. u

Solution

19 )

Correct answer is (a)

Decrease in price of buttress, means now demand for margarine would shift left. Thus it will shift to r.

20)

Right answer is (d)

An increase in price of soybean oil means cost of production shall rise . thus, it will lead to the shift in supply curve to left u.

21)

Correct answer is (d).

22)

Correct answer is (B)

23)

Correct answer is (A)

24)

Correct answer is ( c)