-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?
A)A price of $1,000 and quantity traded of 120.
B)A price of $1,000 and quantity traded of 160.
C)A price of $1,200 and quantity traded of 160.
D)A price of $1,400 and quantity traded of 160.
E)A price of $1,400 and quantity traded of 240.

Question

-Refer to Figure 2.15 to answer this question.Suppose that initially the market was in equilibrium and that demand increased by 60.What will be the new equilibrium as a result?
A)A price of $1,000 and quantity traded of 120. 
B)A price of $1,000 and quantity traded of 160. 
C)A price of $1,200 and quantity traded of 160. 
D)A price of $1,400 and quantity traded of 160. 
E)A price of $1,400 and quantity traded of 240.

Quizplus · Accepted Answer

When demand increases by 60, the new equilibrium is found where the new demand curve intersects the supply curve. This results in a higher price and quantity traded. Option C correctly reflects an increase in both price and quantity, consistent with the effects of an increase in demand.