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:

Retirement Savings Plan

A financial arrangement designed to help individuals save money for their retirement, often involving contributions from both the employee and employer.

Safety Net

A safeguard against failure or hardship, providing security or support in times of need, often used in the context of social welfare or financial systems.

Critical Thinking

The aim is to systematically scrutinize and appraise an issue with the purpose of forming an opinion.

Financial Debt

Money owed by an individual or organization to another party, typically as loans or credit.