Suppose that unusually hot weather causes the demand curve for ice cream to shif

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 demanded

Explanation / 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.

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