Refer to the accompanying graph. The change in equilibrium shown in the graph would be explained by a(n) ________ in the price of an input and a(n) ________ in the price of a ________.

Question

BlackTom AI · Accepted Answer

An increase in the cost of an input reduces supply (shifts the supply curve left), and an increase in the price of a complement reduces demand (shifts the demand curve left).

Relevant concepts:
- Supply shifts left (decrease in supply) when production becomes more expensive (e.g., higher input prices).
- Demand shifts left (decrease in demand) when consumers buy less at every price (e.g., if a complement becomes more expensive).
- Equilibrium price and quantity are determined by the intersection of supply and demand; simultaneous shifts affect price depending on relative magnitudes, but quantity moves in the direction both shifts agree on.

Step-by-step reasoning using the graph:
1. The graph shows the supply curve moving from S1 to S2 (leftward) and the demand curve moving from D1 to D2 (leftward). Both shifts reduce equilibrium quantity from Q1 to Q2.
2. A leftward supply shift is explained by an increase in the price of an input (higher input cost lowers producers’ willingness to supply at each price).
3. A leftward demand shift is explained by an increase in the price of a complement (when a complementary good costs more, people buy less of both goods).
4. The graph also shows equilibrium price falling from P1 to P2. A decrease in equilibrium price despite a leftward supply shift implies the leftward demand shift had a larger downward pressure on price than the upward pressure from reduced supply.

Why the correct answer is correct:
- "Increase; increase; complement" matches: increase in input price → supply decreases (S1 → S2 left), increase in complement’s price → demand decreases (D1 → D2 left). Both lower quantity; net price falls as shown.

Why other options are incorrect:
- (b) and (c) state a decrease in input price, which would shift supply right (opposite of the graph).
- (c) and (d) involve a substitute: an increase in the price of a substitute raises demand for this good (shifts demand right), but the graph shows demand shifting left.

Conclusion: The graph is explained by an increase in the price of an input and an increase in the price of a complement, so option a is correct.

Refer to the accompanying graph. The change in equilibrium shown in the graph would be explained by a(n) in the price of an input and a(n) in the price of a .单项选择题

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Refer to the accompanying graph. The change in equilibrium shown in the graph would be explained by a(n) ________ in the price of an input and a(n) ________ in the price of a ________.单项选择题