Question

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

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 cause increased supply and decreased price.
D. Fewer pairs of jeans sold results in a decrease in both price and supply."

Answer 1

The correct answer is B. Demand for more pairs of jeans results in an increase in both price and quantity supplied.

You can see that demand is increasing since d2 is on the right of d1. You can also see that prices increase since p2 is greater than p1. You can also see that quantity supplied also increases since q2 is on the right of q1.