Figure: Supply-Driven Price Change Refer to the figure. When the supply curve shifts from S₀ to S₁, the equilibrium price rises to:

Question

Quizplus · Accepted Answer

When the supply curve shifts to the right, the equilibrium price and quantity both increase. In this case, the supply curve shifts from S₀ to S₁, meaning there is an increase in supply. Therefore, the equilibrium price will increase from $10 to $12, and the equilibrium quantity will decrease from 100 to 70. Choice A is the only option that reflects this change in equilibrium price and quantity.

Figure: Supply-Driven Price Change Refer to the Figure