Figure 4-15 -Recycling of Newspapers Has Been Undermined by Its Success.The Supply

Multiple Choice

Figure 4-15

-Recycling of newspapers has been undermined by its success.The supply of old papers, gathered diligently by those concerned with the environment, has increased dramatically, as has the number of firms that convert the material into recycled newsprint.The quantity demanded has remained relatively stable despite falling prices because newspapers consider recycled newsprint an inferior substitute for regular newsprint.Consequently, the price of recycled newsprint has fallen below the cost of production; recycling firms are going out of business; mountains of old newspapers are left behind.Which graph in Figure 4-15 best illustrates this situation?

A) 1 
B) 2 
C) 3 
D) 4