Question

The price (P) of designer jeans is affected by the supply (S) and the demand (D).

What does this graph show?

Answer 1

A. Demand for more pairs of jeans causes reduced supply and increased price.
B. Demand for more pairs of jeans results in an increase in both price and quantity supplied.
C. Fewer pairs of jeans sold causes increased supply and decreased price.
D. Fewer pairs of jeans sold results in a decrease in both price and supply.

Answer 2

Okay, here, the demand has shifted right. Therefore, there has been an increase in demand. With this increase in demand, price level has increased and quantity has increased.

Based on this information,

A is incorrect
C is incorrect
D is incorrect

So, I'd say that B is the answer. Does that make sense?