Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It decreases
B
It remains the same
C
It increases
D
It fluctuates unpredictably
Understanding the Answer
Let's break down why this is correct
Answer
When demand for a product increases but the supply stays the same, the equilibrium price will rise. This happens because more people want to buy the product, but there is still only a limited amount available. For example, imagine a popular toy that everyone wants for the holidays. Since the toy company can only produce a certain number of toys, the higher demand means buyers are willing to pay more to get one. As a result, the price of the toy goes up until it reaches a new equilibrium where the quantity demanded matches the quantity supplied.
Detailed Explanation
When more people want to buy a product, they are willing to pay more for it. Other options are incorrect because Some might think that more demand means lower prices; It's a common mistake to think that prices stay the same when demand increases.
Key Concepts
equilibrium price
Topic
Analyzing Market Equilibrium Changes
Difficulty
easy level question
Cognitive Level
understand
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