Asked by Brooke Candia on Jun 04, 2024
Verified
If price declines,
A) there may have been an increase in supply.
B) there may have been a decrease in demand.
C) there may have been a decrease in supply.
D) there may have been an increase in supply AND a decrease in demand.
E) there may have been a decrease in demand AND a decrease in supply.
Increase in Supply
A situation where the quantity of a good or service that producers are willing and able to sell, at a given price, rises.
Decrease in Supply
A situation where the quantity of a good or service that producers are willing to offer for sale at a given price level decreases.
Decrease in Demand
A reduction in the quantity of a good or service that consumers are willing and able to purchase at a given price range.
- Comprehend the nexus between supply, demand, and price modifications.
Verified Answer
ZK
Zybrea KnightJun 07, 2024
Final Answer :
D
Explanation :
A decrease in price can be caused by an increase in supply or a decrease in demand, or both. Therefore, options A, B, and C are partially correct but not the best choice as they only provide one reason for the price decline. Option E is incorrect as it suggests that both demand and supply decreased, which is unlikely to cause a price decline. Option D is the best choice as it takes into account both an increase in supply and a decrease in demand, which are the most common factors causing a price decline.
Learning Objectives
- Comprehend the nexus between supply, demand, and price modifications.