An increase in the demand for a commodity accompanied by a decrease in its supply will result in a(n):

Question

Quizplus · Accepted Answer

When demand increases and supply decreases, this creates a shortage in the market. As a result, buyers will compete for the available goods, leading to upward pressure on prices. However, the reduced supply also limits the quantity of goods available in the market, which can lead to a decrease in the quantity sold. Therefore, price could increase or decrease, but the quantity will either stay the same or decrease.

An Increase in the Demand for a Commodity Accompanied by a Decrease