An increase in the equilibrium price of electricity can be caused by
A)An increase in the supply of electricity.
B)An increase in the demand for electricity.
C)A decrease in the demand for electricity.
D)An increase in the quantity demanded of electricity.

Question

Quizplus · Accepted Answer

An increase in demand for electricity means there is more competition for a limited supply, leading to a higher equilibrium price. Option A, an increase in supply, would actually cause a decrease in the equilibrium price. Option C, a decrease in demand, would also cause a decrease in the equilibrium price. Option D, an increase in quantity demanded, refers to a movement along the demand curve and would not cause a shift in the equilibrium price.

An Increase in the Equilibrium Price of Electricity Can Be