Question

select the correct point on the graph.
the price of mangoes is currently $5.00 per pound. at this price, producers are supplying 4,000 pounds of mangoes. point c on the graph shows the current equilibrium price and quantity. to which point will the equilibrium shift if the demand increases suddenly because of a non - price determinant of demand?

Explanation:

Step1: Analyze Demand Shift

When demand increases (non - price determinant), the demand curve shifts right from demand curve 1 to demand curve 2. The supply curve remains the same.

Step2: Find New Equilibrium

The equilibrium is at the intersection of the new demand curve (demand curve 2) and the supply curve. Looking at the points, point B is at the intersection of demand curve 2 and the supply curve. The original equilibrium was point C. After the demand shift, the new equilibrium should be at point B as it is on the new demand curve (demand curve 2) and the supply curve.

Answer:

B. (The point corresponding to the intersection of demand curve 2 and the supply curve, which is point B)