Assuming competitive markets with typical supply and demand curves, which of the following statements is correct?

Question

Quizplus · Accepted Answer

An increase in demand with no change in supply will result in an increase in price, which will also result in an increase in revenue. Option A is incorrect because a decrease in demand will typically result in a decrease in price, not an increase. Option B is only partially correct since an increase in supply with no change in demand can result in either an increase or decrease in price depending on the magnitude of the increase in supply. Option C is also incorrect since an increase in supply with no change in demand will not necessarily result in a decline in revenue.

Assuming Competitive Markets with Typical Supply and Demand Curves, Which