Use the figure below to answer the following question.
The diagram concerns supply adjustments to an increase in demand (D1 to D2) in the immediate period, the short run, and the long run. In the long run, the increase in demand will
A. increase both equilibrium price and quantity.
B. increase equilibrium price but not equilibrium quantity.
C. have no effect on either equilibrium price or quantity.
D. increase equilibrium quantity but not equilibrium price.
Answer: A
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A) short run; rise B) long run; rise C) short run; fall D) long run; fall
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