Refer to the following graphs to answer the question below.

A set of 4 graphs shows the variation of price on vertical axis with quantity on horizontal axis.In all the four graphs, two increasing lines, S1 and S2 intersects two decreasing lines, D1 and D2 at points E1 and E2, respectively.In graph 1, the positive shifts from D1 to D2 (to the right) and from S1 to S2 (to the right) are shown where P1 equals P2 and quantity increases from Q1 to Q2. E1 shifts to E2 (to the right).In graph 2, the negative shifts from D1 to D2 (to the left) and from S1 to S2 (to the left) are shown where P1 equals P2 and quantity decreases from Q2 to Q1. E1 shifts to E2 (to the left).In graph 3, a positive shift from S1 to S2 (to the right) and a negative shift from D1 to D2 (to the left) is shown where P1 decreases to P2 and Q1 equals Q2. E1 shifts to E2 (to the bottom).In graph 4, a negative shift from S1 to S2 (to the left) and a positive shift from D1 to D2 (to the right) is shown where P1 increases to P2 and Q1 equals Q2. E1 shifts to E2 (to the bottom).

Select the graph above that best shows the changes in demand and supply in the market for music CDs sold in stores, if more consumers switch to music-downloads from the Internet, and the cost of making music CDs decreases because of technological improvement in production.

rev: 05_07_2018

Multiple Choice

graph (4)

graph (1)

graph (3)

graph (2)