Assume the demand for flash drives increases,while the supply decreases.Which of the following outcomes is certain to occur?
A) The equilibrium price of flash drives will rise.
B) The equilibrium quantity of flash drives will rise.
C) The equilibrium price of flash drives will fall.
D) The equilibrium quantity of flash drives will fall.
E) Neither the equilibrium price nor the equilibrium quantity of flash drives can be predicted.

Question

Quizplus · Accepted Answer

When demand increases and supply decreases, there will be a shortage of flash drives. As a result, the equilibrium price will increase to balance the market, as consumers will be willing to pay more due to the scarcity of flash drives. The equilibrium quantity may either rise or fall, depending on the extent of the changes in demand and supply. However, the rise in the price is certain.

Assume the Demand for Flash Drives Increases,while the Supply Decreases