-Refer to Exhibit 3-16

Multiple Choice

-Refer to Exhibit 3-16.Which of the following is false?

A) Graph (1) : There is a shortage of this good when the price is equal to P₃.
B) Graph (2) : As supply increases,equilibrium quantity remains constant.
C) Graph (3) : As demand increases,equilibrium price remains constant.
D) Graph (4) : As supply changes,equilibrium price stays the same.