Holding supply constant, an increase in demand leads to
A) lower prices and higher quantity supplied.
B) lower prices and lower quantity supplied.
C) higher prices and higher quantity supplied.
D) higher prices and lower quantity supplied.

Question

Quizplus · Accepted Answer

An increase in demand will shift the demand curve to the right, causing both higher prices and higher quantity supplied as suppliers attempt to capitalize on the increased demand. Therefore, option C, higher prices and higher quantity supplied, is the correct choice.

Holding Supply Constant, an Increase in Demand Leads to