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 demanded of sailboats decreased
D)the price of sailboats increased and the higher price caused the supply of sailboats to increase

Question

Quizplus · Accepted Answer

According to the law of supply, a decrease in supply would lead to an increase in price and a decrease in quantity demanded. Therefore, Choice C is the correct option in this scenario. Choice A is incorrect because an increase in price would not cause a decrease in demand. Choice B is incorrect because a decrease in the supply of sailboats would not cause an increase in the equilibrium quantity. Choice D is incorrect because an increase in the price of sailboats would not cause an increase in supply.

Select the Phrase That Correctly Completes the Following Statement