Question

In recent years, the world demand curve for copper shifted rightward due to continued economic growth in China and other emerging economies. Also, the costs of extracting the copper increased due to higher energy prices. As a result, we observed:

Answer 1

With this combination of events, we can expect to observe higher equilibrium copper prices.

Step-by-step explanation:

The reasons is that there are two economic forces pushing the market-clearing price upwards: the economic growth in China shifting the demand curve rightwards, and the higher production costs raising the supply curve.

Because of the higher production costs, firms will have to raise the selling price of copper, and at the same time, the higher demand from China will prevent any fall in demand due to the higher prices, actually driving the price even higher.