The Diagram Concerns Supply Adjustments to an Increase in Demand

question 207

Multiple Choice

The diagram concerns supply adjustments to an increase in demand (D₁ to D₂) in the immediate market period, the short run, and the long run. In the long run, the increase in demand will

• A)have no effect on either equilibrium price or quantity.
• B)increase equilibrium price but not equilibrium quantity.
• C)increase equilibrium quantity but not equilibrium price.
• D)increase both equilibrium price and quantity.