If the demand for a good or service increases how were prices affect Supply a rising process will boost Supply be falling prices will decrease Supply see Rising prices will decrease Supply defaling prices will boost Supply

Answer 1

When the demand for a good or service increases, prices generally rise due to the higher competition among consumers for the limited supply. Here's how supply is typically affected:

1. Rising Prices: When prices rise due to increased demand, this signals producers to increase supply. Higher prices make it more profitable for producers to supply more of the good or service, leading them to either increase production or enter the market. This is known as the law of supply.

2. Falling Prices: Conversely, if demand decreases, prices tend to fall. Falling prices can signal producers to decrease supply, as lower prices may not cover costs or profits.

In summary:

• Rising prices (due to increased demand) often lead to an increase in supply.
• Falling prices (due to decreased demand) often lead to a decrease in supply.

Thus, rising prices boost supply, while falling prices decrease supply.