Question

Complete the following sentence. An increaseAn increase in the demand for pizzapizza brings a​ ______ of...

Complete the following sentence.

An increaseAn increase

in the demand for

pizzapizza

brings a​ ______ of

pizzapizza

at the original price and the market price will​ ______ .

A.

surplussurplus​;

riserise

B.

shortageshortage​;

riserise

C.

shortageshortage​;

fallfall

D.

surplussurplus​;

fall

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Answer #1

An increase in the demand for pizza brings a shortage of pizza at the original price and market price will rise.

If the demand for pizza increases then at the equlibrium market price people will demand for more pizza than the quantity supplied , thus eventually equilibrium market price will increase . Graphically, here initially at P0 the demand and supply for pizza is equal Q0 then as demand increses people demand for Q1 units of pizza at price P0 that will lead to have excess demand Q1-Q0 units at P0 tgus price will increase upto P1 when again demand and supply will be same at Q2

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