If the Supply of a Product Decreases by More Than

question 133

Multiple Choice

If the supply of a product decreases by more than the demand increases:

• A)​the price will rise and the quantity traded will fall.
• B)​the price will rise, but the quantity traded could either rise or fall.
• C)​the price will fall, but the quantity traded could either rise or fall.
• D)​the quantity traded will rise, but the price could either rise or fall.

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Definitions:

Total Cost

The total amount of money spent on producing goods or services, encompassing both constant and fluctuating expenses.

ATC

Average Total Cost, which is the total cost of production divided by the number of units produced, encompassing both fixed and variable costs.

TC/q

Total cost divided by quantity; a formula to calculate the average total cost.

Average Total Cost

The sum of all production expenses divided by the quantity of products made, indicating the per-unit cost.