If the demand for a good or service increases, how will prices affect supply?(1 point)

Question

Responses

Rising prices will boost supply.
Rising prices will boost supply.

Falling prices will decrease supply.
Falling prices will decrease supply.

Rising prices will decrease supply.
Rising prices will decrease supply.

Falling prices will boost supply.

Answer 1

The correct response is:

Rising prices will boost supply.

When demand for a good or service increases, prices tend to rise. Higher prices generally incentivize producers to supply more of the good or service to capitalize on the potential for higher profits.