An increase in the demand for GM automobiles results in
A) a lower equilibrium price for GM automobiles.
B) an increase in the quantity of GM automobiles supplied.
C) an increase in the supply of GM automobiles.
D) a lower equilibrium quantity of GM automobiles.
E) a decrease in the quantity of GM automobiles supplied.

Question

Quizplus · Accepted Answer

An increase in demand for GM automobiles will result in an increase in the quantity of GM automobiles supplied, as producers will want to take advantage of the high demand and increase production to meet the demand. However, the equilibrium price will likely increase due to the increase in demand. Choices A, C, D, and E are all incorrect as they do not accurately show the relationship between demand and the supply and/or price of GM automobiles.

An Increase in the Demand for GM Automobiles Results in