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A-Level Economics · Shift in demand diagram question

Why does price rise from £5 to £6 after the shift?

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The diagram

The answer

At £5 there is now excess demand, which bids the price up. Chain: incomes rise → demand shifts right → excess demand at £5 → price bid up → extension of supply → new equilibrium at F. Point, cause, consequence: at the old price £5 buyers now want more than sellers offer — that excess demand bids the price up until the market clears at £6.

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This is one of 3 questions on the shift in demand diagram — every corner lettered, every wrong answer diagnosed.

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