How Does Improved Technology in the Chicken Industry Affect Market Equilibrium?

[davie08]

Homework Statement

Refer to the above graph, which shows the market for chicken where D1 and D2 represent different demand curves. A change from E1 to E2 is most likely to result from:
Answer


a)a decrease in consumer incomes.


b)an increase in the wages of chicken workers.


c)an increase in the price of beef products.


d)improved technology in the chicken industry.

The Attempt at a Solution

the graph is in the attachment.

I'm not sure what this would be but I guess it couldn't be c since on the graph it shows that the price is lowered.

 

[noleguy33]

Shifts in the demand curve come from all things that aren't the price of chicken.

Which of those four things would decrease consumer demand of chicken?

 

[davie08]

so it would be a decrease in consumer incomes.

 

[noleguy33]

That would be my guess.

 

[DeeNos]

The correct answer is d) improved technology in the chicken industry. This is because a shift from E1 to E2 indicates an increase in supply, which can be caused by advancements in technology that make it more efficient and cost-effective to produce chicken. This would result in a lower price and a higher quantity of chicken being demanded, as shown on the graph.