Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Price increases and quantity decreases
B
Price decreases and quantity decreases
C
Price increases and quantity increases
D
Price remains the same
Understanding the Answer
Let's break down why this is correct
Answer
When demand increases while supply stays the same, it means more people want to buy a product, but the amount available for sale does not change. This higher demand leads to a situation where buyers are willing to pay more to get the item they want, which raises the price. For example, if a popular toy is in high demand during the holiday season but stores have only a limited supply, parents might compete with each other, driving the price up. As the price rises, some people may decide not to buy the toy, which can lead to fewer sales at the higher price. Overall, this shift can create a new market equilibrium where the price is higher, and the quantity sold may stabilize at that new level.
Detailed Explanation
When more people want a product but there is the same amount available, the price goes up. Other options are incorrect because Some might think that higher demand means lower prices; It's a common mistake to think that higher demand means more products are sold.
Key Concepts
supply and demand
Topic
Analyzing Market Equilibrium Changes
Difficulty
easy level question
Cognitive Level
understand
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