Assuming a downward sloping demand curve and upward sloping supply curve a higher equilibrium price may be caused by ?
Correct answer: D. An increase in demand
- A. An fall in demand
- B. An increase in supply
- C. improvements in production technology
- D. An increase in demand
Explanation
An increase in demand shifts the demand curve rightward and raises the equilibrium price when supply slopes upward. The other listed changes either reduce price or shift supply rightward, which lowers price.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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