What Will Happen If Both the Demand for and Supply

question 22

Multiple Choice

What will happen if both the demand for and supply of a product increase simultaneously?

• A)The effect on the price is indeterminate.
• B)The price will increase.
• C)The price will decrease.
• D)The effect on quantity traded is indeterminate.

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Definitions:

Primary Activities

Those business activities related to the production and distribution of the firm’s products and services, thus creating value.

Support Activities

Business activities that do not add value directly to a firm’s product or service under consideration but support the primary activities that do add value.

Add Value

To add value means to enhance or increase the worth of a product or service through additional features, improved quality, or enhancement of some form.

Differentiation

The process of making a product, service, or business model stand out from competitors, often through unique features, quality, or branding.