If the supply of a product decreases by more than the demand increases:
A)the price will rise and the quantity traded will fall.
B)the price will rise, but the quantity traded could either rise or fall.
C)the price will fall, but the quantity traded could either rise or fall.
D)the quantity traded will rise, but the price could either rise or fall.

Question

If the supply of a product decreases by more than the demand increases:
A)​the price will rise and the quantity traded will fall.
B)​the price will rise, but the quantity traded could either rise or fall.
C)​the price will fall, but the quantity traded could either rise or fall.
D)​the quantity traded will rise, but the price could either rise or fall.

Quizplus · Accepted Answer

If the supply of a product decreases by more than the demand increases, the quantity of the product available for trade will fall, which will push the price up due to the scarcity of the product. Higher prices will discourage some buyers, leading to a decrease in quantity traded. Therefore, the price will rise, and the quantity traded will fall.

If the Supply of a Product Decreases by More Than