Understanding Supply and Demand

What happens to the price of a product when the demand increases but the supply remains the same?

• The price decreases.

• The price increases.

• The price remains the same.

• There is not enough information to determine.

If the supply of a product exceeds the demand, what is likely to happen to the price of the product?

• The price will increase.

• The price will decrease.

• The price will remain unchanged.

• The product will be discontinued.

What does the law of demand state?

• As the price of a product increases, its supply also increases.

• As the price of a product increases, the demand for it decreases.

• As the price of a product decreases, its supply decreases.

• As the price of a product decreases, the demand for it remains unchanged.

Which of the following factors can cause a shift in the demand curve for a product?

• Change in the price of the product itself.

• Change in consumers' income.

• Change in the price of a substitute product.

• Both B and C are correct.

What is the equilibrium price?

• The price at which the quantity of the product supplied is higher than the quantity demanded.

• The price at which the quantity of the product demanded is higher than the quantity supplied.

• The price at which the quantity of the product demanded equals the quantity supplied.

• A fixed price set by the government.

What does the law of supply state?

• As the price of a product decreases, suppliers will offer more of it for sale.

• As the price of a product increases, suppliers will offer less of it for sale.

• As the price of a product increases, suppliers will offer more of it for sale.

• As the price of a product decreases, suppliers will offer less of it for sale.

What is a surplus in the context of supply and demand?

• A situation where the demand for a product exceeds its supply.

• A situation where the supply of a product exceeds its demand.

• A situation where the price of a product is set too high.

• A situation where the price of a product is set too low.

What can cause a movement along the demand curve for a product?

• A change in the product's price.

• A change in consumers' income.

• A change in the price of related goods.

• A change in consumer preferences.

What is meant by "market equilibrium"?

• When the government sets the price for all goods and services.

• When the demand for a product is exactly equal to its supply.

• When there is a surplus of goods in the market.

• When there is a shortage of goods in the market.

What happens when there is a decrease in the supply of a product but demand remains constant?

• The price of the product decreases.

• The price of the product increases.

• The demand for the product decreases.

• The demand for the product increases.