Question

When demand curve shifts to the right, the

A price tends to fall
B price tends to rise
C demand increases (Excess demand)
D both B and C

Answer 1

A rightward shift in the demand curve represents an increase in demand, which generally leads to a rise in price due to higher demand at every price level. Thus, both price tends to rise and demand increases are correct.

Step-by-step explanation:

When the demand curve shifts to the right, it indicates an increase in demand at every price level, meaning that consumers are willing to buy more of the good or service at the same price. This shift typically results in a higher price, as the market adjusts to the higher demand with a new equilibrium price. Therefore, the correct answer is D: both B (price tends to rise) and C (demand increases) are true when the demand curve shifts to the right.