When the demand for coffee increases,ceteris paribus,the equilibrium price will also increase because
A)A shortage exists at the old equilibrium price.
B)There must be a surplus of the good.
C)The market supply and demand curves do not intersect.
D)Market demand must be upward-sloping.

Question

Quizplus · Accepted Answer

When the demand for coffee increases, consumers will be willing to buy more coffee at the current price. This creates a shortage, as the quantity demanded exceeds the quantity supplied, causing sellers to increase their prices to capture the extra demand. This adjustment process will continue until the quantity supplied increases to meet the quantity demanded at the new, higher price level, which is the new equilibrium price.

When the Demand for Coffee Increases,ceteris Paribus,the Equilibrium Price Will