In which of the following statements are the terms demand, supply, quantity demanded, and/or quantity supplied used correctly?
A)When the quantity demanded exceeds supply, the equilibrium price will rise.
B)Changes in demand and supply cause changes in the equilibrium price.
C)If the demand rises, supply rises.
D)Oranges are cheaper in Florida; therefore, the demand is greater in Florida.
E)Decreases in quantity demanded and quantity supplied often occur simultaneously.

Question

Quizplus · Accepted Answer

This statement correctly uses the terms demand, supply, and equilibrium price. It implies that changes in the factors affecting demand and/or supply will lead to a shift in the demand or supply curve, resulting in a new equilibrium price.

A, C, D, and E incorrectly use one or more of the terms demand, supply, quantity demanded, and/or quantity supplied. In A, the terms demand and supply are used correctly, but the statement incorrectly implies that equilibrium price will rise when quantity demanded exceeds supply, whereas it is the other way around. In C, the statement implies that supply rises in response to an increase in demand, which is generally not the case. In D, the statement confuses the concepts of demand and price; a lower price for oranges in Florida may indicate higher supply and/or lower demand, but it does not necessarily imply higher demand. In E, the statement uses the terms quantity demanded and quantity supplied correctly, but it does not explain why they decrease simultaneously.

In Which of the Following Statements Are the Terms Demand