The Following Questions Refer to the graph below.
-Which of the following could lead to a price of $20 in the market?
A)An increase in demand
B)A decrease in supply
C)A decrease in demand
D)An increase in supply
E)An increase in both supply and demand

Question

The Following Questions Refer to the graph below. 
-Which of the following could lead to a price of $20 in the market?
A)An increase in demand 
B)A decrease in supply 
C)A decrease in demand 
D)An increase in supply 
E)An increase in both supply and demand

Quizplus · Accepted Answer

A decrease in supply would cause the equilibrium price to increase, leading to a price of $20 in the market. This can be seen in the graph where a decrease in supply shifts the supply curve to the left, resulting in a higher equilibrium price at the point where the supply and demand curves intersect.

The Following Questions Refer to the Graph Below