If supply and demand intersect at a price of $5.00, then a reduction in price from $6.00 to $5.00 will cause an increase in quantity:
A) supplied, a decrease in quantity demanded, and the alleviation of a shortage.
B) demanded, a decrease in quantity supplied, and the alleviation of a shortage.
C) supplied, a decrease in quantity demanded, and the alleviation of a surplus.
D) demanded, a decrease in quantity supplied, and the alleviation of a surplus.

Question

Quizplus · Accepted Answer

When the price decreases from $6.00 to $5.00, which is the equilibrium price, the quantity demanded increases, the quantity supplied decreases, and any surplus that existed at $6.00 is alleviated.

If Supply and Demand Intersect at a Price of $5