Assuming an increase in Demant and decrease in Supply, which of the following statements is TRUE? The price of the good will decrease. The quantity of the good will definitely decrease. The price of this good will definitely increase. There will be a permanent shortage of this good. The new equilibrium quantity may increase, decrease, or stay the same. A surplus of this good will result from these changes in Supply and Demand. What new equiLibrium quantity will result depends on the relative magnitude of the changes and the shapes of the Demand and Supply curves. We cannot determine what will happen to price.
Assuming an increase in Demant and decrease in Supply, which of the following statements is TRUE?
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The price of the good will decrease. |
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The quantity of the good will definitely decrease. |
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The price of this good will definitely increase. |
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There will be a permanent shortage of this good. |
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The new |
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A surplus of this good will result from these changes in Supply and |
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What new equiLibrium quantity will result depends on the relative magnitude of the changes and the shapes of the Demand and Supply |
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We cannot determine what will happen to price. |
Demand represents the desire that is backed by the purchasing power and the willingness to pay of the consumer. The law of demand states that there is a negative relationship between the price and quantity demanded of a product, other factors remaining the same.
Supply is the quantity supplied by a seller at a particular price. The law of supply states that there is a positive relationship between the price and quantity supplied of that product, other factors remaining the same.
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