Final Answer:
Suppose the market for roses is currently in equilibrium. If the supply of roses falls, while at the same the demand for roses rises. Therefore the correct option is c) Price will increase, and quantity will decrease.
Step-by-step explanation:
When the supply of roses falls and demand simultaneously rises in a market initially at equilibrium, it creates a situation of excess demand, also known as a shortage. As the supply decreases, sellers are willing to offer fewer roses at the existing price. Simultaneously, increased demand means that consumers are willing to buy more roses at that same price. However, since the quantity demanded exceeds the quantity supplied, a shortage occurs.
To alleviate the shortage, sellers are likely to respond by raising the price of roses. The increase in price serves as an incentive for suppliers to produce more roses while also discouraging some buyers from purchasing due to the higher cost. As the price rises, the quantity supplied is expected to increase, and the quantity demanded is likely to decrease. Eventually, the market will reach a new equilibrium where the quantity supplied equals the quantity demanded, but at a higher price.
Therefore, option c) accurately reflects the economic dynamics in this scenario. The price of roses is expected to increase due to the shortage, while the quantity exchanged in the market is anticipated to decrease as both buyers and sellers adjust their behavior in response to the changes in supply and demand. Therefore the correct option is c) Price will increase, and quantity will decrease.