me figure below shows supply curves following questions for soft drinks. Analyze

Question

me figure below shows supply curves following questions for soft drinks. Analyze the figure and answer the Gmarks) Si 1. Suppose the economy is at point a. A movement to point b could be the resut of A) an decroase in technology B) an increase in government subsidies C) an increase in the price of a soft dink movement 2. Suppose the economy is at point a. An increase in the technology is shown as a from point a to A) point cd E)point b C) poirs c 3. Suppose the economy is at point a A movement to point c would be the resuit of: A) a decrease in the price of a soft drink. 8) an increase in the price of a soft drink C) an increase in the in the price of raw materials used

Explanation / Answer

Answer : 1. A movement from point a to point b according to the diagram is the result of B) an increase in government subsidies. Because of increased subsidies firm produces more as a result output increase and the economy moves to point b.

2. The economy moves from point a to B) point b. Because of increase in technology firm's production increase and the economy moves to point b.

3. The economy moves from point a to point c because of A) a decrease in the price of a soft drink.

4. According to diagram and future expectation to decrease in price level the economy moves from point a to C) point c.

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