Suppose you observe that the price of a good increases and that the quantity of this good sold also increases. If only the demand curve or the supply curve shifts this suggests that
A) supply increased over time while demand remained the same.
B) supply decreased over time while demand remained the same.
C) demand increased over time while supply remained the same.
D) demand decreased over time while supply remained the same.

Question

Quizplus · Accepted Answer

An increase in both price and quantity can only occur when there is an increase in demand and no decrease in supply. Therefore, if only one curve shifts, it must be the demand curve that shifts to the right (i.e. an increase in demand), while supply remains the same.

Suppose You Observe That the Price of a Good Increases