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

Question

Price (dollars per ton of plywood) Price (dollars per ton of plywood) D2 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) S 2 Quantity (tons of Quantity (tons of plywood per month) plywood per month) Figure C Figure D The number of new houses being bult begins to rise and the new houss need plywood for their framing. Which of the above figures best illustrates this changet? Figure A Figure B Figure C Figure D vens to save cil a

Explanation / Answer

Demand for Plywood has increased in short run due to increase building home activity and supply cannot be increased in short run

Therefore rightward shift of demand curve will be seen along the supply curve which shows Price increase for plywood

Hence Diagram A depicts this scenario very correctly

Option A is correct choice

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