Use the figure below to answer the following question.
Figure 12.5.1
-Refer to Figure 12.5.1.Given the increase in market demand from D₀ to D₁,the graph represents

Question

Use the figure below to answer the following question. Figure 12.5.1 -Refer to Figure 12.5.1.Given the increase in market demand from D₀ to D₁,the graph represents

Quizplus · Accepted Answer

As the market demand increases from D₀ to D₁, there is a shift from point A to point B on the graph. This shift results in an increase in the equilibrium price and quantity of output. However, the increase in quantity is not proportionate to the increase in demand due to the fixed supply of resources. This results in an increase in the cost of production and therefore, an increasing cost industry.

Use the Figure Below to Answer the Following Question