An increase in the equilibrium price for a product will result
A)when the quantity of the product demanded exceeds the quantity supplied.
B)when there is a decrease in supply and an increase in demand for the product.
C)when there is a decrease in supply and a decrease in demand for the product.
D)when there is an increase in demand and an increase in the number of firms producing the product.

Question

Quizplus · Accepted Answer

An increase in the equilibrium price for a product occurs when there is a decrease in supply and an increase in demand for the product. This is because the quantity demanded exceeds the quantity supplied at the old equilibrium price, causing the price to increase until a new equilibrium is reached where the quantity demanded is equal to the quantity supplied at a higher price. An increase in demand alone or an increase in the number of firms producing the product may not necessarily result in an increase in the equilibrium price.

An Increase in the Equilibrium Price for a Product Will