The price of X was $10 in year 1 and $14 in year 2.Which of the following could be the correct reason for the rise in price?
A) The demand for X was higher in year 2 than in year 1,ceteris paribus.
B) The supply of X was lower in year 2 than in year 1,ceteris paribus.
C) The demand was higher,and the supply was lower,in year 2 than in year 1.
D) a and b
E) a,b,and c

Question

Quizplus · Accepted Answer

All options provided are valid reasons for the rise in price. A higher demand (A) or a lower supply (B) individually, or both occurring together (C), can lead to an increase in price, assuming all other factors remain constant (ceteris paribus).

The Price of X Was $10 in Year 1 and $14