Which of the following would cause an unambiguous increase in the equilibrium price in a market?
A)a rightward shift in supply and a rightward shift in demand.
B)a rightward shift in supply and a leftward shift in demand.
C)a leftward shift in supply and a rightward shift in demand.
D)a leftward shift in supply and a leftward shift in demand.

Question

Quizplus · Accepted Answer

A leftward shift in supply means that at the current price level, producers are willing to supply less. A rightward shift in demand means that consumers are willing to buy more at the current price level. Both of these factors combined would cause a shortage, which would put upward pressure on prices until a new equilibrium is reached at a higher price level. A leftward shift in supply would cause a decrease in the equilibrium quantity and an increase in the equilibrium price. A rightward shift in demand would cause an increase in both the equilibrium quantity and the equilibrium price. Therefore, a leftward shift in supply and a rightward shift in demand would cause an unambiguous increase in the equilibrium price.

Which of the Following Would Cause an Unambiguous Increase in the Equilibrium