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Graph titled Market Demand has price along the vertical axis and quantity along the horizontal axis. Price values range from 0 to 5 dollars while quantity values range from 0 to 500 units. A line labeled D slopes downward and to the right on the graph. It has points at 5 dollars, 100 units; 4 dollars, 200 units; 3 dollars, 300 units; 2 dollars, 400 units; 1 dollar, 500 units

Based on the graph, what would it mean if quantity falls from 500 units to 300 units?
The price increased.
The price decreased.
The demand increased.
The demand decreased.

1 answer

If the quantity falls from 500 units to 300 units on the demand graph, it means that the price increased. As indicated by the downward slope of the demand curve (D), a decrease in quantity demanded is associated with an increase in price. Therefore, the correct statement is:

The price increased.