Question

the price of a good will rise when: a. there is a surplus of the good. b. the supply of the good increases. c. there is a shortage of the good. d. demand for the good decreases.

Explanation:

• A surplus (a) means supply exceeds demand, which pushes prices down, not up.
• Increased supply (b) shifts the supply curve right, leading to lower equilibrium prices.
• A shortage (c) occurs when demand exceeds supply; consumers compete for scarce goods, driving prices upward.
• Decreased demand (d) shifts the demand curve left, resulting in lower equilibrium prices.

Answer:

c. there is a shortage of the good.