Which of the Following Is True of the Interaction of Supply

question 356

Multiple Choice

Which of the following is true of the interaction of supply and demand?

• A) As the price increases, the quantity demanded and the quantity supplied will increase.
• B) As the price increases, the quantity demanded and the quantity supplied will decrease.
• C) As the price increases, the quantity demanded increases and the quantity supplied will decrease.
• D) As the price increases, the quantity demanded will decrease and the quantity supplied will increase.
• E) As the price increases, neither the quantity demanded nor quantity supplied will change.

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Definitions:

Trade Area

The geographic region from which a business draws its customers.

Market Segments

Subsets of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities like needs, characteristics, or behaviors.

Excessive Costs

Costs that exceed the expected or budgeted amount, often leading to financial strain for a business.

Segmentation Variables

Criteria used to divide a market into smaller segments, based on characteristics such as demographics, psychographics, geography, or behavior.