If price increases and the quantity purchased increases, we know that
A) supply increased.
B) supply decreased.
C) demand increased.
D) demand decreased.

Question

Quizplus · Accepted Answer

This scenario describes a situation where there is an increase in demand, as evidenced by the increase in both price and quantity purchased. When supply increases, we typically expect to see a decrease in price (due to greater availability), but in this case, price has gone up. When supply decreases, we would expect to see a decrease in quantity purchased (since there is less available), but in this case, quantity has gone up. Therefore, the most likely explanation is that demand has increased, leading to both a higher price and higher quantity purchased.

If Price Increases and the Quantity Purchased Increases, We Know