Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It decreases
B
It increases
C
It remains the same
D
It becomes unpredictable
Understanding the Answer
Let's break down why this is correct
Answer
When there is an increase in market demand and supply stays the same, the equilibrium price will rise. This happens because more people want to buy the product, but the amount available doesn't change. For example, imagine a popular toy that many kids want for their birthdays. If more parents start looking for this toy, but the store has the same number of toys to sell, they can charge a higher price because many people are competing to buy it. As a result, the new higher price balances the increased demand with the limited supply.
Detailed Explanation
When more people want to buy something, they are willing to pay more. Other options are incorrect because Some might think that more demand means lower prices; It's a common mistake to think that demand changes don't affect prices.
Key Concepts
equilibrium price
Topic
Market Demand and Equilibrium Changes
Difficulty
easy level question
Cognitive Level
understand
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