Suppose that unusually hot weather causes the demand curve for ice cream to shif
ID: 1145523 • Letter: S
Question
Suppose that unusually hot weather causes the demand curve for ice cream to shift to the right. Why will the price of ice cream rise to a new market-clearing level? The hot weather will O A. shift the demand curve to the right, initially creating a surplus until the price rises to where quantity supplied again equals quantity demanded. O B. shift the supply curve to the right, initially creating a shortage until the price rises to where quantity supplied again equals quantity demanded. O c shift the demand curve to the right, initially creating a shortage until the price rises to where quantity supplied again equals quantity demanded. O D. cause the supply curve to become fixed, initially creating a shortage until the price rises to where quantity supplied again equals quantity demanded O E. shift the demand curve to the right, initially creating a shortage until the price falls to where quantity supplied again equals quantity demandedExplanation / Answer
Option (C).
When weather is hotter, demand for ice cream increases, which shifts demand curve rightward. Initially, higher demand will create a shortage (= Excess demand), and this will push up the price until price is high enough at which quantity demanded equals quantity supplied.