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.
Correct Answer:
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