If Demand Increases and Supply Decreases, What Is the Effect

question 111

Multiple Choice

If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?

• A) The price falls and the quantity might increase, decrease, or remain the same.
• B) The price rises and the quantity might increase, decrease or remain the same.
• C) The quantity decreases and the price might rise, fall, or remain the same.
• D) The quantity increases and the price might rise, fall, or remain the same.

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Definitions:

Initial Velocity

The velocity of an object at the beginning of a period of time, crucial for solving kinematic equations.

Coin

A piece of metal issued by governmental authority as money.

Ground

The solid surface of the earth or a reference level against which measurements or comparisons can be made.

Vertex

A corner point where two or more lines, edges, or rays meet, often used in geometry.