What is the effect of a decrease in the supply of a product?
A) It will cause an increase in both the price and the quantity traded.
B) It will cause an increase in the price but a decrease in the quantity traded.
C) It will cause a decrease in both the price and in the quantity traded.
D) It will cause a decrease in the price but an increase in the quantity traded.

Question

Quizplus · Accepted Answer

A decrease in supply typically leads to a higher price because the product becomes scarcer, and a lower quantity traded because there is less of the product available in the market.

What Is the Effect of a Decrease in the Supply