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Assume that the electricity from nuclear power has become a preferred source of electricity because it is cleaner than electricity produced by burning coal. At the same time, new regulations make it more expensive to produce electricity from nuclear power. What are the consequences?

(A) The demand curve for nuclear power will shift to the right, and supply for nuclear power will shift to the right. The result wil be an increase in both the equilibrium quantity and price for nuclear power.
(B) The demand curve for nuclear power will shift to the right, and the supply of nuclear power will shift to the ieft. The result will be an unknown change in the equilibrium price and an increase in the equilibrium quantity
(C) The demand curve for nuclear power will shift to the right, and the supply of nuclear power will shift to the left. The result will be a rise in the equilibrium price but an unknown change in the equilibrium quantity
(D) The demand curve for nuclear power will shift to the left, and the supply of nuclear power will shift to the right. The result will be an unknown change in the equilibrium price and a decrease in the equilibrium quantity

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Answer:

The correct answer is the option A: The demand curve for nuclear power will shift to the right and supply for nuclear power will shift to the right. The result will be an increase in both the equilibrium quantity and price for the nuclear power.

Explanation:

To begin the explanation, the shifts of the curves in the economy graphics are due to certain factors that tend to move the curve itself, changing the whole situation in the market. Moreover, this factors such as the price or the preference for the good will generate either an increase or decrease of the demand and supply of the good, regarding how the change affects the curves.

To continue, in this case, the preference for the good has increase therefore an increase in the demand of the good is produced moving the curve to the right, making it increase its quantity. Furthermore, the price of the good has increased also due to the new regulations and therefore the supply will increase too because of the law of supply, making the curve move towards to the right increasing the price as well.

In conclusion, both the demand curve and the supply curve will shift right due to certain factors and that situation will cause and increase in both the equilibrium price and quantity demanded.

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