Figure 14-7 ​

Multiple Choice

Figure 14-7
​

-Refer to Figure 14-7. Suppose a firm in a competitive market, like the one depicted in graph (a) , observes market price rising from P₁ to P₂. Which of the following could explain this observation?

A) The entry of new firms into the market.
B) The exit of existing consumers from the market.
C) An increase in market supply from S₀ to S₁.
D) An increase in market demand from D₀ to D₁.