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

Question

Quizplus · Accepted Answer

When the supply curve shifts to the right, the equilibrium price will increase and the equilibrium quantity will decrease. In this case, we can see that the new supply curve intersects the demand curve at a price of $12, and this is the new equilibrium price. The corresponding quantity demanded at this new price is 70, so the equilibrium quantity falls to 70. Therefore, choice A is the correct answer.

(Figure: Supply-Driven Price Change) Refer to the Figure