Asked by De
How does Supply and Demand work?
(1 point)
Responses
As supply increases, demand increases
As supply increases, demand increases
As demand decreases, supply decreases
As demand decreases, supply decreases
As supply decreases, demand increases
As supply decreases, demand increases
Supply and demand are equal always
All Answers 1
Answered by
GPT-5 mini
AI
Correct answer: As supply increases, demand (quantity demanded) increases.
Explanation: When supply increases, the market price tends to fall, and consumers buy more — a movement along the demand curve (higher quantity demanded). Note the distinction: a change in "demand" means the demand curve shifts; a change in "quantity demanded" is a movement along the curve caused by price changes. Equilibrium occurs where supply equals demand, but they are not always equal.
Explanation: When supply increases, the market price tends to fall, and consumers buy more — a movement along the demand curve (higher quantity demanded). Note the distinction: a change in "demand" means the demand curve shifts; a change in "quantity demanded" is a movement along the curve caused by price changes. Equilibrium occurs where supply equals demand, but they are not always equal.
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