Monopolies can misallocate resources by restricting output in an attempt to raise prices and profits

When the demand for coffee increases, ceteris paribus, the equilibrium price will also increase because

A. A shortage exists at the old equilibrium price. B. The market supply and demand curves do not intersect. C. Market demand must be upward-sloping. D. There must be a surplus of the good.

If a positive permanent supply shock were to occur, the resulting equilibrium would be a:

A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.