A newspaper headline asserts: "Rising Demand Pushes Up Housing Prices." This headline
A)incorrectly implies that the demand for housing can change, whereas in fact only the quantity of housing demanded can change.
B)incorrectly implies that the price of housing will rise when demand increases.
C)incorrectly implies that more housing will be demanded at higher prices.
D)correctly implies that an increase in demand will increase the market clearing price.

Question

Quizplus · Accepted Answer

The headline correctly implies that an increase in demand will increase the market clearing price. When demand for housing increases, there will be more buyers competing for the limited supply of housing, which leads to an increase in the market clearing price. This headline does not make any incorrect implications about the ability to change demand, the causality between demand and price, or the relationship between quantity demanded and price.

A Newspaper Headline Asserts: "Rising Demand Pushes Up Housing Prices