question archive The price of automobiles is rising because more people want to purchase cars
The price of automobiles is rising because more people want to purchase cars
Subject:EconomicsPrice:2.88 Bought3
The price of automobiles is rising because more people want to purchase cars. As a result,
a. supply shifts to the right.
b. supply shifts to the left.
c. quantity supplied increases.
d. quantity demanded decreases.
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- The correct option (c) - quantity supplied increases.
In general, the supply curve of a product slopes upwards and depicts that as the price rises, the quantity supplied rises and vice versa. Here, it is given that the price of automobiles rises as people want to buy more cars which in turn leads to a rise in the quantity supplied of cars in the market.
