question archive Last year a firm made 1000 units of its product available at a price of $5 per unit
Last year a firm made 1000 units of its product available at a price of $5 per unit
Subject:MarketingPrice:2.88 Bought3
Last year a firm made 1000 units of its product available at a price of $5 per unit. This year the firm will still make 1000 units available, but only if the price is $7 per unit. What is most likely to have happened?
- a. Quantity supplied has increased
- b. Supply has decreased
- c. Supply has increased
- d. Quantity supplied has decreased
- e. Demand has increased
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Option e. Demand has increased is correct
This option is correct because an increase in demand causes an increase in price for a product. It shows that the supply remains constant or does not change. It means demand increases with no change in supply then the price and output increases.
