Price (dollars per ton of plywood) Price (dollars per ton of plywood) D2 Di Di Q

Question

Price (dollars per ton of plywood) Price (dollars per ton of plywood) D2 Di Di 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) Si Quantity (tons of plywood per month) Quantity (tons of plywood per month) A Figure C Figure D effort to protect endangered species from the effects of logging in America's national forests, the federal government passes a law prohibiting logging in most of the state of Washington. Which of the figures above best illustrates the effect of this new law? Figure A Figure B O Figure O Figure D ick Save and Submit to save and submit Click Save All Answers to save all answers

Explanation / Answer

Since with the imposition of federal government law prohibiting law for protecting endangered species, the logging has decreased. So the supply of plywood decrease, so the supply curve shifts leftward from S1 to S2.

As a result equilibrium price increase and quantity decrease.

All this has been shown in the diagram C.

Hence option third is the correct answer.

Option third; figure C.

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