Which of the following best describes the sequences of events that lead to a price increase and quantity decrease when supply decreases?
Choose 1 answer:
(A) When supply decreases, there is a shortage because at the old price. Price will adjust upward until the market clears at a new lower quantity.
(B) When supply decreases, there is a shortage because at the old price. Price will adjust upward until the market clears at a new lower quantity.
(c) When supply decreases, there is a surplus because at the old price. Price will adjust upward until the market clears at a new lower quantity.
(D) When supply decreases, there is a surplus because at the old price. Price will adjust upward until the market clears at a new lower quantity.
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