Question

Consider the market for MP3 players, illustrated in the figure to the right. The market is initially in equilibrium at a price of $70 and at a quantity of 250 (thousand) players. Suppose there is a positive change in technology Use the line drawing tool to show how this affects the MP3 market by adding either a new supply curve or a new demand curve S1 Carefully follow the instructions above, and only draw the required objects. As a result of the positive change in technology, the new equilibrium price will be and the new equilibrium quantity will beY 으 Suppose instead that the demand curve shifts to the right Then, relative to the initial market equilibrium, A. the new equilibrium price would be lower and the new equilibrium quantity would be lower. B, the new equilibrium price would be higher and the new equilibrium quantity would be lower C. the new equilibrium price would be lower and the new equilibrium quantity would be higher D· the new equilibrium price would be higher and the new equilibrium quantity would be higher.

Answer 1

When the demand curve shifts to the right, the new equilibrium price and quantity will be higher.

Step-by-step explanation:

When the demand curve shifts to the right, the new equilibrium price and quantity will depend on the size of the shift. In general, a rightward shift in the demand curve will result in a higher equilibrium price and a higher equilibrium quantity. Therefore, the correct answer is D. The new equilibrium price would be higher and the new equilibrium quantity would be higher.