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Why Does the Equilibrium Quantity Change When There Is an Increase

Question 62

Multiple Choice

Why does the equilibrium quantity change when there is an increase in demand?


A) A shortage leads to a decrease in price, and a lower price increases quantity supplied and decreases quantity demanded.
B) A surplus leads to a decrease in price, and a lower price increases quantity supplied and decreases quantity demanded.
C) A shortage leads to an increase in price, and a higher price increases quantity supplied and decreases quantity demanded.
D) A shortage leads to an increase in price, and a higher price decreases quantity supplied and decreases quantity demanded.

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