When supply decreases and demand increases, what happens to a price of a good?

Answer 1

When supply decreases and demand increases, the price of a good typically increases. This occurs because the decrease in supply means that there is less of the good available in the market, while the increase in demand means that there is greater competition among consumers to purchase the limited supply. In response to this increased demand and limited supply, sellers tend to raise the price of the good in order to maximize their profits.