Rightward shift in demand will cause an increase in price

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Suppose one of your friends offered the following argument: A rightward shift in demand will cause an increase in price. The increase in price will cause a rightward shift of the supply curve, which would lead to an offsetting decrease in price. Therefore, it is impossible to tell what effect an increase in demand will have on price. Do you agree with your friend? If so, explain why? If not, what is the flaw in your friend’s argument?.

Reference no: EM13998590

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