New potash deposit increases supply

Steps:

• Identify the event: Discovery of a new potash deposit lowers production costs and increases available quantity.
• Determine market impact: This shifts the supply curve rightward in the potash market.
• Predict equilibrium change: Rightward supply shift lowers equilibrium price and raises equilibrium quantity.
• Match to diagrams: Select the one showing supply shift right with new equilibrium at lower price and higher quantity.

Why D is correct:

• D depicts a rightward supply curve shift, aligning with the law of supply where increased resource availability expands supply at every price.

Why the others are wrong:

• A shows leftward supply shift, indicating decreased supply like a resource shortage.
• B shows rightward demand shift, reflecting increased buyer interest not present here.
• C shows leftward demand shift, suggesting reduced demand unrelated to the supply event.

Final answer: D