Price (dollars per ton of plywood) Price (dollars per ton of plywood D2 D i D2 Q

Question

Price (dollars per ton of plywood) Price (dollars per ton of plywood D2 D i D2 Quantity (tons of Quantity (tons of plywood per month) plywood per month) Figure A Figure B Price (dollars per ton of plywood) Price (dollars per ton of plywood) Quantity (tons of Quantity (tons of plywood per month) plywood per month) k Figure G Figure D Plywood and Reinforced Polyurethane Foam (RFP) are substitutes in consumption. Suppose the price of RFP increases. Which of the figures above best illustrates the effect of this change on the market for plywood? Figure A Figure B Figure C Figure D ctck Save and Subnit to save and submit. Click Save All Ansuers to save all ansuwers

Explanation / Answer

Plywood and RFP are substitutes in consumption.

When two goods are substitute in consumption then increase in price of one leads to the increase in demand for other and vice-versa.

So, if the price of RFP increases then demand for plywood will increase.

Increase in demand for plywood will shift the demand curve for plywood to the right.

In figure A, demand curve is shifting to the right from D1 to D2.

So, figure A best illustrates the effect of this change on the market for plywood.

Hence, the correct answer is the option (1) [Figure A].

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.