Asked by Rachel Dusett on Apr 26, 2024
Verified
Which factor ALWAYS results in an increase in price and quantity?
A) an increase in supply and a decrease in demand
B) an increase in demand with no change in supply
C) an increase in supply with no change in demand
D) a decrease in demand and supply
Supply
Supply represents the quantity of goods or services that market participants are willing and able to provide at various price levels, over a specific period of time.
Demand
The quantity of a good or service that consumers are willing and able to purchase at a given price over a certain period of time.
Equilibrium Price
The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market situation.
- Identify the contrast between movements along the supply and demand curves and the shifts of these curves within the context of supply and demand analysis.
Verified Answer
RA
Riley AndeltMay 02, 2024
Final Answer :
B
Explanation :
An increase in demand with no change in supply will always result in an increase in both price and quantity. This is because the higher demand will cause sellers to increase the quantity supplied at a higher price, leading to an equilibrium where both price and quantity are higher than before.
Learning Objectives
- Identify the contrast between movements along the supply and demand curves and the shifts of these curves within the context of supply and demand analysis.