Select the phrase that correctly completes the following statement."A decrease in the number of manufacturers caused a decrease in the supply of sailboats.As a result
A)the price of sailboats increased and the demand for sailboats decreased."
B)the equilibrium quantity of sailboats increased."
C)the price of sailboats increased and the quantity of sailboats demanded decreased."
D)the price of sailboats increased.The higher price caused the supply of sailboats to increase."

Question

Quizplus · Accepted Answer

When the supply of sailboats decreases due to a decrease in the number of manufacturers, it causes a decrease in the quantity of sailboats demanded. This creates a shortage in the market, which leads to an increase in the price of sailboats. Therefore, the correct phrase to complete the statement is "the price of sailboats increased and the quantity of sailboats demanded decreased." Option A is incorrect because a decrease in supply causes an increase in price and decrease in demand. Option B is incorrect because a decrease in the number of manufacturers would generally lead to a decrease in the equilibrium quantity. Option D is incorrect because it suggests that an increase in price causes an increase in supply, which is not true.

Select the Phrase That Correctly Completes the Following Statement