If you observed that the market price of a good rose, while the quantity exchanged fell, which of the following could have caused the change?
A)An increase in supply.
B)A decrease in supply.
C)An increase in demand.
D)A decrease in demand.

Question

If you observed that the market price of a good rose, while the quantity exchanged fell, which of the following could have caused the change?
A)​An increase in supply.
B)​A decrease in supply.
C)​An increase in demand.
D)​A decrease in demand.

Quizplus · Accepted Answer

A decrease in supply would lead to a higher market price for the good, as the reduced availability makes each unit more valuable. At the same time, the quantity exchanged would fall because there are fewer units available for sale.

If You Observed That the Market Price of a Good