Question

Which situation would cause the price of a product to fall the most ?

A. the demand rise while the supply falls
B. the demand falls while the supply rises
C. Both the demand and supply rise
D. Both the demand and the supply fall.

Answer 1

The demand falls while the supply rises would cause the price of a product to increase the most. Thus, option B is correct.

What is the price?

The quantity of money being supplied or needed to be paid for a commodity or service is referred to as the price.

The demand would generally fall when the supplier would increase the quantity within the market. This would further call for the price of the product to increase significantly to maintain the flow of the commodity or the service in the market. As demand and supply have an inverse relationship.

Therefore, option B is the correct option.

Answer 2

Answer: B. the demand falls while the supply rises

Step-by-step explanation:

The price of a product is determined by the interaction of two major economic factors: demand and supply. The law of supply and demand states that if demand for a product increases while the supply remains constant, the price of the product will rise. On the other hand, if demand decreases while supply remains constant, the price of the product will fall. In the case where both demand and supply rise, the price of the product will increase, but to a lesser degree than if only demand had risen. Finally, if both demand and supply fall, the price of the product will fall the most, since there is a decrease in both the desire for the product and the ability to produce it.