Along a given demand curve, a decrease in supply will typically

Question

Quizplus · Accepted Answer

According to the law of demand, when supply decreases, the price of the good will increase. This is because there will be less of the good available to consumers, and therefore they will be willing to pay more to obtain it. As a result of the higher price, the quantity demanded will decrease. Therefore, a decrease in supply will typically lead to an increase in price and a decrease in quantity demanded, as described in option B.

Along a Given Demand Curve, a Decrease in Supply Will