An increase in the equilibrium price for a product will result
A)when the quantity demanded for the product 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

When there is a decrease in supply and an increase in demand for the product, the equilibrium price will increase. This is due to the fact that there is less of the product available in the market, but a higher demand for it. As a result, consumers are willing to pay more for the product, which leads to an increase in the equilibrium price.

An Increase in the Equilibrium Price for a Product Will