FIGURE 4-3
-Refer to Figure 4-3. The diagram shows a rightward shift in the demand curve for some good, and the
Short-run and long-run supply curves SS and SL, respectively). In the new short-run equilibrium after the increase in demand, producersʹ revenue
A) is unambiguously lower than in the long-run equilibrium at EL.
B) could be higher or lower than at E0, depending on the short-run elasticity of supply.
C) is unambiguously higher than at E0.
D) is unambiguously lower than at E0.
E) is unambiguously higher than at EL.

Question

FIGURE 4-3
-Refer to Figure 4-3. The diagram shows a rightward shift in the demand curve for some good, and the
Short-run and long-run supply curves SS and SL, respectively). In the new short-run equilibrium after the increase in demand, producersʹ revenue
A) is unambiguously lower than in the long-run equilibrium at EL. 
B) could be higher or lower than at E0, depending on the short-run elasticity of supply. 
C) is unambiguously higher than at E0. 
D) is unambiguously lower than at E0. 
E) is unambiguously higher than at EL.

Quizplus · Accepted Answer

In the short-run, a rightward shift in the demand curve typically leads to an increase in price and quantity, resulting in higher producer revenue compared to the initial equilibrium E0.

FIGURE 4-3 -Refer to Figure 4-3. the Diagram Shows a Rightward Shift