When demand increases there is a ______ at the old equilibrium price, which puts ______ pressure on price until the market reaches the new equilibrium.
A) surplus; downward
B) surplus; upward
C) shortage; upward
D) shortage; downward

Question

Quizplus · Accepted Answer

When demand increases, there is a shortage at the old equilibrium price because the quantity demanded is greater than the quantity supplied. This puts upward pressure on price until the market reaches the new equilibrium where the quantity demanded equals the quantity supplied.

When Demand Increases There Is a ______ at the Old