What is the expectation when demand increases for a good?

When demand for a good increases, the expectation is that the market will reach a new equilibrium. This occurs because an increase in demand typically leads to a higher equilibrium price and quantity.

As demand rises, consumers are willing to purchase more of the good at every price level, which puts upward pressure on prices. Suppliers, noticing that consumers are willing to pay more, are incentivized to produce and sell more of that good. As the price rises, the market adjusts until it finds a new equilibrium where the quantity demanded equals the quantity supplied at that new higher price.

This adjustment reflects the fundamental principle of supply and demand, which indicates that shifts in demand lead to changes in both price and quantity in the market. Consequently, the new equilibrium represents a temporary balance between buyers and sellers under the new demand conditions.

The other choices do not capture the full dynamics of how markets respond to an increase in demand; they do not incorporate how supply adjusts or the resulting changes in equilibrium.