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Microeconomics

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Market Shifts: Pencil Pushers

MICRO-ZN1LY5

After a particular brand of pens started exploding and harming many people, everyone agreed that it was time for pens to be banned. And so, pens were banned.

Pens and pencils are considered substitutes by consumers - the more pens they have, the fewer pencils they need, and vice versa.

After the ban, factory owners who were previously making pens will retrofit their factories to instead produce pencils.

Which of the following graphs represents the changes in the market for pencils that will occur after pens are banned?

A

Nicholas Huntington-Klein. Created for Albert.io. Copyright 2016. All rights reserved.

B
C

Nicholas Huntington-Klein. Created for Albert.io. Copyright 2016. All rights reserved.

D

Nicholas Huntington-Klein. Created for Albert.io. Copyright 2016. All rights reserved.

E