Asked by Hannah Strength on May 25, 2024
Verified
The supply curve slopes up and to the right.If the demand curve shifts upward to a new curve which is everywhere higher than the old curve (but possibly of different slope)and if the supply curve does not shift, then the equilibrium price and quantity must necessarily increase.
Supply Curve
A graph representing the relationship between the price of a good or service and the quantity of it that producers are willing to supply.
Equilibrium Price
The market price at which the quantity of a good demanded equals the quantity supplied, leading to market stability.
- Examine the influence of supply and demand curve shifts on the equilibrium of the market.
Verified Answer
CE
Courtney Esteban BrownMay 29, 2024
Final Answer :
True
Explanation :
If the demand curve shifts upward, it means that consumers are willing to pay a higher price for the same quantity of goods, which puts upward pressure on prices. As the supply curve is fixed, the market would have to adjust by increasing the equilibrium price to reach a new balance between supply and demand. This increase in price will also result in an increase in the quantity of goods sold, as producers are incentivized to produce more at the higher price. Therefore, the statement is true.
Learning Objectives
- Examine the influence of supply and demand curve shifts on the equilibrium of the market.
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