FIGURE 8-1

-Refer to Figure 8-1. In Graph A, what is the result of the market demand increasing from D₀ to D₁?

Question

FIGURE 8-1
 
-Refer to Figure 8-1. In Graph A, what is the result of the market demand increasing from D₀ to D₁?

Quizplus · Accepted Answer

In Graph A, when the market demand increases from D₀ to D₁, the equilibrium price increases from $5 to $6, and the equilibrium quantity traded in the market increases from Q0 to Q1. The price received by the price-taking firm also increases from $5 to $6, which is the new market price. Therefore, choice C is correct, and the other options are incorrect.

FIGURE 8-1 -Refer to Figure 8-1. in Graph A, What Is the A