Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:
A. supply has decreased and equilibrium price has increased.
B. demand has increased and equilibrium price has decreased.
C. demand has increased and equilibrium price has increased.
D. demand has decreased and equilibrium price has decreased.
Answer: B
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Suppose that the productivity used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?
What will be an ideal response?
When the economy is at its potential output level, which of the following is true? a. The price level is higher than that expected by workers. b. The nominal wage is equal to the real wage
c. The unemployment rate is about 14 percent. d. The economy is producing its maximum sustainable output. e. The actual price level is less than the expected price level.