Question

what happens in the market with an upward sloping supply curve when there is a shift in the demand curve due to an external shock?
a. price will not change
b. price will immediately adjust to a new equilibrium
c. production decisions will be unaffected
d. a new equilibrium price will be achieved over some period of time

Explanation:

When an external shock shifts the demand curve in a market with an upward - sloping supply curve, the market does not adjust instantaneously. There will be a process of adjustment. Producers and consumers will react over time to the new market conditions, and a new equilibrium price and quantity will be established over some period as market forces work.

Answer:

D. A new equilibrium price will be achieved over some period of time