Suppose We Observe an Increase in the Price of Good

question 121

Multiple Choice

Suppose we observe an increase in the price of good A and an increase in the quantity of good A exchanged.Which of the following is a likely explanation?

• A)The "law of demand" is violated.
• B)The "law of supply" is violated.
• C)The supply of good A has increased.
• D)There is an excess supply of good A.
• E)The demand for good A has increased.

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Definitions:

Housing

Refers to the residential accommodations available for individuals or families, including houses, apartments, and other living spaces.

Rents

Payments made for the use of property or land. In economics, it can also refer to income derived from the ownership of scarce resources.

Law Of Supply

A principle stating that, all else being equal, an increase in price results in an increase in quantity supplied.

Law Of Demand

The economic principle that, all else equal, an increase in the price of a good will decrease the quantity demanded, and conversely, a decrease in price will increase the quantity demanded.