Q54
When equilibrium price rises but equilibrium quantity remains unchanged, the cause is
A.
Supply and demand both increase equally
B.
Supply and demand both decrease equally
C.
Supply decreases and demand increases
AnswerD.
Supply increases and demand decreases
Answer: Option C
Solution
Answer: Option C
Solution:
When equilibrium price rises but equilibrium quantity remains unchanged, the cause is supply decreases and demand increases. As price increases, it serves as an incentive for suppliers to increase supply and also leads to a fall in demand. It is important to realize that these processes continue to operate until a new equilibrium is established.