Question

Suppose one of your friends offered the following argument: Market for Widgets A rightward shift in demand will cause an increase in p supply curve, which will lead to an offsetting decrease in price. Therefore, it is impossible to tell what effect an increase in demand will have on price rice. The increase in price will cause a rightward shift of the Do you agree with your friend? O A. Yes, any time both the supply and demand curves shift, it becomes impossible to accurately determine the impact on the price of a good B. No, the offsetting supply shift caused by the higher price will not be as large as the demand shift, so we know the a price will rise some C. No, the increase in pric e will not cause a shift of the supply curve D. Yes, since the shift in demand that raises the price must cause an offsetting shift in supply, we cannot know the impact on price Using the graph, show a shift in demand for widgets and how that shift in demand impacts the supply of widgets uantity (millions of boxes) 1.) Using the line drawing tool, depict an increase in demand for widgets. Label your curve D2 2.) Using either the line drawing tool or the single arrow drawing tool, depict the impact of the shift in demand on the supply for widgets. Either place an arrow showing how the quantity supplied changes along the supply curve, or draw a new supply curve to illustrate a shift in the entire supply curve Carefully follow the instructions above and only draw the required objects

Answer 1

Answer:

C. No, the increase in price will not cause a shift of the supply curve

Attached graph

Explanation:

The demand curve will move to the right, and the equilibrium price adn quantity will increase as a result of this event. But, the supply curve will not move the new equilibrium will be along the original supply line.

The supply curve will move affectd by technology, input prices, taxation, interest rates changes, the price is not what determinates the supply curve. The price is the result of how supply and demand interact.