Questions: Refer to Figure 4-4. The movement from point A to point B on the graph is called (A) an increase in supply. (B) a decrease in the quantity supplied. (C) an increase in the quantity supplied. (D) a decrease in supply.

Solution Steps

The graph shows a movement from point A to point B. Point A is at a lower price level (P1) and a lower quantity level (Q1), while point B is at a higher price level (P2) and a higher quantity level (Q2).

The movement from point A to point B indicates an increase in both price and quantity. This type of movement typically represents a change along the supply curve.

An increase in the quantity supplied occurs when there is a movement along the supply curve due to a change in price. Since the movement is from a lower price and quantity to a higher price and quantity, it is an increase in the quantity supplied.

Final Answer