Asked by Amber Koeuth on Jul 29, 2024
Verified
Suppose a market is in equilibrium.An increase in demand in this market will lead to a(n) :
A) increase in supply.
B) decrease in supply.
C) decrease in quantity supplied.
D) increase in quantity supplied.
E) decrease in equilibrium price.
Quantity Supplied
The amount of a good or service that producers are willing to sell at a given price over a specified period.
- Gain an insight into the notion of market equilibrium and the dynamics pushing towards it.
- Acquire knowledge about the consequences of demand fluctuations on market stability.
Verified Answer
CW
colette walkerJul 29, 2024
Final Answer :
D
Explanation :
An increase in demand will create a shortage in the market, leading to an incentive for suppliers to increase their quantity supplied in order to take advantage of the higher prices. This will lead to an increase in quantity supplied but not necessarily an increase in supply. The equilibrium price will also increase as a result of the increase in demand.
Learning Objectives
- Gain an insight into the notion of market equilibrium and the dynamics pushing towards it.
- Acquire knowledge about the consequences of demand fluctuations on market stability.
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