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:

Economy Moves

The various shifts and changes in the economic activities and conditions within an economy over time.

Supply

The total amount of a specific good or service that is available to consumers at a particular price over a given period.

Equilibrium Price

The price at which the quantity of a good supplied equals the quantity of the good demanded.

Equilibrium Quantity

The quantity of goods supplied is equal to the quantity of goods demanded at the market price.