When demand increases,
A) price rises and quantity supplied increases.
B) price falls and quantity supplied decreases.
C) price falls with no change in supply.
D) supply increases so that price remains the same.
E) supply decreases and price rises.

Question

Quizplus · Accepted Answer

When demand increases, there is more pressure on suppliers to provide more of the product. This typically results in an increase in price (because suppliers can charge more for the increased demand), and an increase in quantity supplied (because suppliers are motivated to produce more). Therefore, choice A is the correct answer.

When Demand Increases