If demand increases and supply decreases in a market that is in equilibrium,quantity will:

Question

Quizplus · Accepted Answer

If demand increases and supply decreases, there will be a shortage of the product, leading to an increase in price. However, the quantity will only increase if the decrease in supply is less than the increase in demand. This is because if the decrease in supply is more than the increase in demand, the shortage will be even greater, causing consumers to compete for the limited supply and driving the price even higher. Therefore, the quantity will only increase if the increase in demand can still be met by the remaining supply, albeit at a higher price.

If Demand Increases and Supply Decreases in a Market That