Suppose Demand Increases and Supply Decreases

question 126

Multiple Choice

Suppose demand increases and supply decreases. Which of the following will happen?

• A) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease.
• B) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase.
• C) Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase.
• D) Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease.
• E) The change in equilibrium price and quantity cannot be determined.

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Definitions:

Numeracy

The ability to understand and work with numbers, including the basic arithmetic skills and the capacity to interpret data, graphs, and statistics.

Literacy

The ability to read and write at a level that enables understanding and communication.

Cognitive Skills

Mental processes used in the acquisition of knowledge, such as memory, reasoning, problem-solving, and attention.

Work-Related Accidents

Incidents that occur in the course of work leading to physical or mental occupational injuries.