The following figure shows the demand and supply curves for a good. The initial demand curve is D₁ and the supply curve is S. Later, due to an external shock, the demand curve shifts to D₂.

-Refer to the figure above.After the demand curve shifts to D₂,if the price is held below the new equilibrium,then ________.
A) the quantity demanded will equal the quantity supplied
B) the quantity demanded will be greater than the quantity supplied
C) the quantity demanded will be less than the quantity supplied
D) there will be zero deadweight loss

Question

The following figure shows the demand and supply curves for a good. The initial demand curve is D₁ and the supply curve is S. Later, due to an external shock, the demand curve shifts to D₂.
 
-Refer to the figure above.After the demand curve shifts to D₂,if the price is held below the new equilibrium,then ________.
A) the quantity demanded will equal the quantity supplied 
B) the quantity demanded will be greater than the quantity supplied 
C) the quantity demanded will be less than the quantity supplied 
D) there will be zero deadweight loss

Quizplus · Accepted Answer

When the demand curve shifts to D₂ and the price is held below the new equilibrium, the quantity demanded will exceed the quantity supplied, leading to a shortage.

The Following Figure Shows the Demand and Supply Curves for a Good