An increase in demand and a decrease in supply cause which of the following?
A) Equilibrium price change is indeterminate.
B) Equilibrium quantity decreases.
C) Equilibrium price falls.
D) Equilibrium price rises.

Question

Quizplus · Accepted Answer

An increase in demand tends to push the price higher because more people want the product, while a decrease in supply means there's less of the product available. Both forces act to increase the equilibrium price.

An Increase in Demand and a Decrease in Supply Cause