Your business is selling more and more refrigerators each month. Applying the law of supplyand demand, what do you expect to happen to the price and supply of these refrigeratorsover the next few months? aThe price will decrease, and supply will increase bThe price will decrease, and supply will decrease. cThe price will increase, and supply will decrease. dThe price will increase, and supply will increase.
Question
Your business is selling more and more refrigerators each month. Applying the law of supplyand demand, what do you expect to happen to the price and supply of these refrigeratorsover the next few months? aThe price will decrease, and supply will increase bThe price will decrease, and supply will decrease. cThe price will increase, and supply will decrease. dThe price will increase, and supply will increase.
Solution
The law of supply and demand states that when demand for a product increases and the supply remains the same, the price will increase. This is because the increased demand puts pressure on the available supply, causing prices to rise.
On the other hand, if a business is able to increase its supply in response to this increased demand, it can help to stabilize or even lower the price. This is because the increased supply can meet the increased demand, reducing the pressure on prices.
So, in the case of your business selling more and more refrigerators each month, if you are able to increase your supply to meet this growing demand, you would expect the price to remain stable or even decrease. However, if you are unable to increase your supply, you would expect the price to increase.
Therefore, the answer to your question depends on whether or not you are able to increase your supply of refrigerators. If you can, the answer would be (a) The price will decrease, and supply will increase. If you cannot, the answer would be (c) The price will increase, and supply will decrease.
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