An increase in demand coupled with a simultaneous and bigger decrease in supply will cause equilibrium
A) price to go up and quantity to go down.
B) price to go up and quantity to go up.
C) price to go down and quantity to go down.
D) price to go down and quantity to go up.

Question

Quizplus · Accepted Answer

An increase in demand leads to higher prices and an increase in quantity demanded, while a decrease in supply leads to higher prices and a decrease in quantity supplied. When the increase in demand is bigger than the decrease in supply, the price will go up and the quantity will go down to reach a new equilibrium point.

An Increase in Demand Coupled with a Simultaneous and Bigger