Question

This graph demonstrates how

Answer 1

The correct answer is: "the amount produced greatly changes with the price."

The supply curve informs about the amount of a certain product that companies are willing to offer in the markets, at the different price levels. The curve has a positive slope because the two variables have a direct relationship: the larger the price, the larger the amount that companies will supply.

Therefore, it will be always related to the quantity produced and not to the quantity consumed, which is connected to the demand schedule instead.

Let's first compute the size of each variation, before reaching a conclusion:

• Variation in prices: (25-20)/20= 0.25
• Variation in the quantity supplied: (8-3)/3=  1.6666

While prices have experienced a rise of the 25%, the amount supplied has increased in the 166,66%. As the variation in the quantity supplied is much larger than the one in prices, the answer is that the amount produced changes greatly with the price.

Answer 2

The answer is that the amount consumed changes greatly with the price. The 1st amount is 20k and 3 cars wers supplied and it more than doubles to 8 if the price increases by 5k.

Hope this helps!