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A-Level Economics · Shift in supply diagram question

New technology cuts firms' production costs, shifting S1 to S2. Which point is the NEW equilibrium?

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The diagram

The answer

Point F. D crosses S2 at point F: £4, quantity 6 — price down, quantity up. After the shift the market moves ALONG D to where D crosses the NEW supply curve — point F: price £4, quantity 6. The equilibrium is always a CROSSING, never an intercept.

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This is one of 6 questions on the shift in supply diagram — every corner lettered, every wrong answer diagnosed.

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