What happens to the price and quantity of cheese sold if the demand for cheese increases and the supply of cheese decreases?

Choose 1 answer:
(A) Price increases; we do not know what happens to quantity.
(B) Price decreases; quantity doesn't change.
(C) Price decreases; we do not know what happens to quantity.
(D) Price decreases; quantity increases.
(E) Price increases; quantity stays the same.

Question

What happens to the price and quantity of cheese sold if the demand for cheese increases and the supply of cheese decreases?

Choose 1 answer:
(A) Price increases; we do not know what happens to quantity.
(B) Price decreases; quantity doesn't change.
(C) Price decreases; we do not know what happens to quantity.
(D) Price decreases; quantity increases.
(E) Price increases; quantity stays the same.

Accepted Answer

***A*** ∻Key Concept∻ ⚹Market Equilibrium⚹ ∻Explanation∻ ⚹When demand for a good increases and supply decreases, the price of the good will rise due to increased competition among buyers and reduced availability. The quantity sold will depend on the relative magnitude of the shifts in demand and supply; without more information, we cannot determine the exact change in quantity.⚹◊What impact would the increase in demand and decrease in supply of cheese have on consumer surplus in the market?⍭ Generate me a similar question◊

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