All else held constant,a decrease in supply will lead to a
A)decrease in price and increase in quantity demanded.
B)increase in price and increase in quantity demanded.
C)increase in price and decrease in quantity demanded.
D)decrease in price and decrease in quantity demanded.

Question

Quizplus · Accepted Answer

When supply decreases, the amount of goods or services available in the market reduces. This creates a shortage and competition among buyers, leading to an increase in price. At the same time, due to the higher price, some consumers may choose to reduce their demand, leading to a decrease in quantity demanded. Therefore, the correct answer is C, an increase in price and a decrease in quantity demanded.

All Else Held Constant,a Decrease in Supply Will Lead to a