After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water?

Question

Quizplus · Accepted Answer

In a market economy, an increase in demand typically leads to an increase in both the equilibrium price and quantity, as suppliers respond to higher demand by raising prices and increasing production.

After a Hurricane in Florida Knocked Out the Regional Water