If both the demand for and the supply of computers are increasing, which of the following statements is TRUE?
A) The consumer should buy a computer now since the price will be higher in the future.
B) The consumer should wait and buy a computer later since the price will be lower in the future.
C) The price of a computer will be the same in the future as it is now.
D) It is impossible to know, given only this information, whether the prices of computers will go up or down in the future.

Question

Quizplus · Accepted Answer

The fact that both the demand for and the supply of computers are increasing does not provide enough information to determine whether prices will go up or down in the future. It is possible that the increase in supply will lead to lower prices, while the increase in demand will lead to higher prices. Without additional information, it is impossible to know which effect will be stronger. Therefore, the best choice is D, as it acknowledges the uncertainty of the situation.

If Both the Demand for and the Supply of Computers