economic question quiz 1. Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:

A. the new equilibrium price and quantity are both greater than they were originally.
B. point M shows the new equilibrium position.
C. an increase in demand has been more than offset by an increase in supply.
D. the equilibrium position has shifted from M to K.

ANSWER:

C. an increase in demand has been more than offset by an increase in supply.