Economics 0455 · IGCSE · Price determination

Price determination — practice question

The diagram illustrates the supply and demand curves for a product. The original market equilibrium is at point $E_1$. A market change results in a new equilibrium at $E_2$. What caused the shift in market equilibrium?

  • Aa decrease in the price of a substitute good
  • Ba decrease in raw material prices
  • Can increase in the price of a substitute good
  • Dan increase in raw material prices

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