Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions :
Figure 3-2
-Let P* and Q* represent market clearing price and quantity, respectively.Given the supply and demand curves drawn in Figure 3-2, a reduction in the price of an input used in the production of Q will cause:

A) P* and Q* to climb.
B) P* to climb while Q* falls.
C) P* to climb while Q* holds steady.
D) P* to fall while Q* climbs.
E) P* and Q* to fall.