1 hour, 38 35 Question Completion Status Exhibit 3-9 shows a shift in the demand

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1 hour, 38 35 Question Completion Status Exhibit 3-9 shows a shift in the demand curve in the market for coffee. Which of the f shifts from D1 to D2- Exhibit 3-59 D2 QUANTITY (MIllions of cups of coffee O a. The surplus will put an upward pressure on price, causing a movement along the supply curve until quantity demanded equals quantity supplied at the new market equilibrium. supplied at the new market equilibrium. supplied at the new market equilibrium. pressure on price, causing a movement along the supply curve until quantity demanded equals quantity O c. The shortag e will put an upward pressure on price, causing a movement along the supply curve until quantity demanded equals quantity along the s Click Save and Submit to save and submit. Click Save All Answers to save all answers All

Explanation / Answer

Ans is C

Initially market is at equilibrium at point A where price=P.

When demand increases, demand curve shifts rightward and at price P, there is excess demand or shortage of supply which leads to upward pressure on price. Thus equilibrium shift from A to B and as price increases, quantity supply also increases leading to movement along the supply curve.

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