5. If demand increases for a good during a pandemic while the supply stays the same, what happens to the demand curve and the price of that good?
a. Demand shifts to the right and the price decreases.
b. Demand shifts to the right and the price increases.
c. Demand shifts to the left and the price decreases.
d. Demand shifts to the left and the price increases.
b. Demand shifts to the right and the price increases.
The correct answer is b. Demand shifts to the right and the price increases.
When demand increases for a good during a pandemic while the supply stays the same, the demand curve shifts to the right. This means that consumers are willing and able to purchase a larger quantity of the good at each price level. As a result, the market price will increase to reach a new equilibrium point where the quantity demanded equals the quantity supplied. Therefore, the price of the good will increase.
To determine the answer, we need to understand the relationship between demand, supply, the demand curve, and prices.
During a pandemic, if the demand for a good increases while the supply remains the same, that means there is now a higher demand for the product compared to its availability. This situation typically results in a shift in the demand curve.
Since the demand is increasing, the demand curve will shift to the right. This shift indicates that consumers are willing to purchase more of the good at each price level.
However, the question also asks what happens to the price of the good. In this scenario, where demand increases and supply remains the same, there is upward pressure on the price. As the demand curve shifts to the right, the price of the good will increase.
Therefore, the correct answer to the question is:
b. Demand shifts to the right and the price increases.