Which situation would cause the price of a product to increase the most?
A. Both the demand and supply rise.
B. Both the demand and the supply fall.
C. The demand rises while the supply falls.
D. The demand falls while the supply rises.
Answer (2)
The situation that would lead to the most significant price increase is when demand rises while supply falls, creating a scarcity of products in the market. This scenario leads to higher prices as buyers compete for limited goods. Understanding the relationship between demand and supply is essential in economics. ;
The situation that causes the highest price increase is when demand rises while supply falls, known as Option C. This scenario creates competition among buyers for a limited supply, resulting in higher prices. By understanding the dynamics of demand and supply, we see how they directly affect market prices.
;
