Thursday, May 15, 2008

An Increase in Demand

An increase in demand is represented by a shift of the demand curve to the right.

Ceteris paribus, in the new equilibrium:

Supply is unchanged. (The supply curve did not move.)
Demand has increased. (The demand curve shifted to the right.)
The quantity supplied increased to the new equilibrium quantity.
The quantity demanded increased to the new equilibrium quantity.
The equilibrium price increased.

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