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Suppose that for a given good demand increases and supply decreases at the same time. If demand increases by a lesser amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good.

a. rises; falls
b. falls; falls
c. rises; rised
d. falls; rises

Respuesta :

Answer:

The correct answer is letter "A": rises; falls.

Explanation:

Given a market for a certain good or service, in case the supply decreases at a fastest pace than the demand increases, the equilibrium price is likely to rise. As a result of the quick drop in the supply for that good or service, the equilibrium quantity is likely to fall.

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