Demand for a food item increases by more than the supply of the food item.One thing for certain is that
A)the price of the food item rises.
B)income elasticity of demand (for the food item)is greater than 1.
C)the supply curve is price elastic.
D)real income rises as a result.
E)none of the above

Question

Quizplus · Accepted Answer

When demand exceeds supply, the price of the food item will rise due to scarcity. This is known as the law of supply and demand. Therefore, choice A is the correct answer. B, C, and D are not necessarily true in this scenario.

Demand for a Food Item Increases by More Than the Supply