A Level Economics (9708)•9708/12/M/J/21

Explanation
Combined Supply and Demand Shifts Steps:
- Rising production costs decrease supply, shifting the supply curve left (higher price, lower quantity ceteris paribus).
- Consumer shift to vegan diet decreases demand, shifting the demand curve left (lower price, lower quantity ceteris paribus).
- Both leftward shifts reduce equilibrium quantity unambiguously.
- New equilibrium occurs at the intersection of the shifted curves, typically showing lower quantity and indeterminate price change.
Why A is correct:
- A shows the equilibrium after both leftward shifts, consistent with the law of supply and demand where quantity falls due to reduced supply and demand.
Why the others are wrong:
- B: Reflects only supply shift (ignores demand decrease, overstates price rise).
- C: Reflects only demand shift (ignores supply increase, understates price effect).
- D: Shows no change or opposite shifts (contradicts both cost rise and diet trend).
Final answer: A
Topic: The interaction of demand and supply
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