The graph above shows supply and demand for electronic readers. the holidays are coming up. what would a producer do in anticipation of a rise in demand, and how would that effect the equilibrium price?

a. add line d3 to the left of d2, showing an increase in demand and equilibrium price.
b. add line d3 to the right of d2, showing an increase in demand and equilibrium price.
c. add line s2 to the right of s, showing an increase in supply and a decrease in equilibrium price.
d. add line s2 to the left of s, showing a decrease in supply and an increase in equilibrium price.

If the current demand is along the D2 curve, then increasing demand would have it shift to the right (indicating more quantities are demanded for a fixed price). So D3 would be to the right of D2

As shown from D1 to D2, the equilibrium price increases. The same can be said going from D2 to D3 as well. In other words, the higher the demand, the higher the equilibrium price. Which is what we'd expect: the more people want a certain item, the more they're willing to pay for it (esp if its in short supply).

Final Choice B) Add D3 to the right of D2; leads to increase in demand and equilibrium price