The product is a normal product.

-What is the effect of a decrease in the supply of a product?

Question

The product is a normal product.
 
-What is the effect of a decrease in the supply of a product?

Quizplus · Accepted Answer

A decrease in supply means that there is less of the product available in the market. This creates a situation where demand exceeds supply, causing an increase in price. However, since there is less of the product available, consumers will be less willing to buy it at the higher price, resulting in a decrease in the quantity traded. Therefore, the correct answer is B - an increase in price but a decrease in the quantity traded.

The Product Is a Normal Product