Answered

Which situation would cause the price of a product to increase the most?

A. Both the demand and the supply fall.
B. The demand rises while the supply falls.
C. The demand falls while the supply rises.
D. Both the demand and supply rise.



Answer :

Final answer:

In economics, an increase in demand leads to a rise in the equilibrium price.


Explanation:

An increase in demand, all other things unchanged, will cause the equilibrium price to rise; quantity supplied will increase.

A decrease in demand will cause the equilibrium price to fall; quantity supplied will decrease.

Therefore, situation D (Both the demand and supply rise) would cause the price of a product to increase the most.


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