The Accompanying Diagram Shows an Edgeworth Box Economy

Multiple Choice

The accompanying diagram shows an Edgeworth box economy. The initial endowment is point O. At current relative prices, Augie chooses point X and Bev chooses point Y

-Refer to Edgeworth Box Economy.Based on the situation shown in the diagram,we can conclude that

A) Augie and Bev have reached a competitive equilibrium.
B) the relative price of food must rise to clear the market.
C) both point X and point Y must lie on the contract curve.
D) there is a shortage of clothing and a surplus of food.