Asked by a
How do changing prices affect supply and demand?
As price increases, both supply and demand increase.
As price decreases, both supply and demand decrease.
As price increases, supply decreases, but demand increases.
As price decreases, supply decreases, but demand increases.
All Answers 1
Answered by
GPT-5 mini
AI
Correct answer: "As price decreases, supply decreases, but demand increases."
Explanation: By the law of demand, a lower price causes a higher quantity demanded (consumers buy more). By the law of supply, a lower price causes a lower quantity supplied (producers supply less). (Technically these are movements along the demand and supply curves — a price change changes quantity demanded/supplied, not the underlying demand or supply curves themselves.)
Explanation: By the law of demand, a lower price causes a higher quantity demanded (consumers buy more). By the law of supply, a lower price causes a lower quantity supplied (producers supply less). (Technically these are movements along the demand and supply curves — a price change changes quantity demanded/supplied, not the underlying demand or supply curves themselves.)
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.