In which of the following scenarios would we definitely know that price will increase but we'd be unable to determine how quantity changes?

Choose 1 answer:
(A) $D \uparrow$ and $S \uparrow$
(B) $D \downarrow$ and $S \downarrow$
(c) $D \uparrow$ and $S$ no change
(D) $D \uparrow$ and $S \downarrow$
(E) $D \downarrow$ and $S \uparrow$

Question

In which of the following scenarios would we definitely know that price will increase but we'd be unable to determine how quantity changes?

Choose 1 answer:
(A) $D \uparrow$ and $S \uparrow$
(B) $D \downarrow$ and $S \downarrow$
(c) $D \uparrow$ and $S$ no change
(D) $D \uparrow$ and $S \downarrow$
(E) $D \downarrow$ and $S \uparrow$

Accepted Answer

***D*** ∻Key Concept∻ ⚹Law of Supply and Demand⚹ ∻Explanation∻ ⚹When demand increases ($D \uparrow$) and supply decreases ($S \downarrow$), the price will definitely increase due to the higher competition for fewer goods. However, the change in quantity is ambiguous because the increase in demand suggests a higher quantity might be sold, while the decrease in supply suggests a lower quantity is available.⚹◊How does an increase in demand and a decrease in supply impact the overall price level in the market?⍭ Generate me a similar question◊

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