Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in price
B
Increase in quantity supplied
C
Decrease in price
D
Decrease in quantity demanded
Understanding the Answer
Let's break down why this is correct
Answer
When production costs go up, it becomes more expensive for producers to make goods, which means they supply less of those goods. If at the same time, consumer demand decreases, it means fewer people want to buy those goods. This combination usually leads to a decrease in price because sellers will lower prices to attract more buyers and sell their excess products. For example, if a toy company produces fewer toys due to high costs and fewer kids want to buy them, the company may lower prices to encourage sales. Therefore, the correct answer is C: Decrease in price.
Detailed Explanation
When people want to buy less, sellers lower prices to attract buyers. Other options are incorrect because Some might think lower demand means higher prices; It's a common mistake to think more supply comes with less demand.
Key Concepts
Supply and Demand
Market Equilibrium
Price Elasticity
Topic
Supply and Demand Interactions
Difficulty
easy level question
Cognitive Level
understand
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