Exhibit 4-3 Supply and demand curves

Beginning from an equilibrium at point E₂ in Exhibit 4-3, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Question

Exhibit 4-3 Supply and demand curves

Beginning from an equilibrium at point E₂ in Exhibit 4-3, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Quizplus · Accepted Answer

An increase in demand would shift the demand curve to the right, causing the equilibrium point to move to a higher quantity and a higher price. Therefore, the new equilibrium point would be at a higher intersection point of the supply curve and the new demand curve. This corresponds to point E₃.

Exhibit 4-3 Supply and Demand Curves