If the demand for a good increases while supply decreases, which of the following outcomes is likely?

When demand for a good increases, it indicates that consumers are willing and able to purchase more of that good at each price level. Simultaneously, if supply decreases, it means producers are supplying less of the good, possibly due to higher production costs or other constraints.

In this scenario, the simultaneous increase in demand and decrease in supply creates two opposing pressures on the market. The increase in demand tends to push prices higher, as consumers are competing for a limited quantity of the good. Conversely, the decrease in supply also exerts upward pressure on prices because there are fewer goods available to meet the heightened demand.

While both factors contribute to an increase in price, the effect on quantity is less clear. The quantity sold may rise or fall depending on the relative magnitudes of the shifts in demand and supply. If the increase in demand is significantly stronger than the decrease in supply, the quantity sold may rise. However, if the decrease in supply is substantial, it could offset the potential increase in quantity from demand, leading to a decline. Therefore, the outcome for quantity is uncertain—it could either rise or decrease based on how these factors interact.

This explanation aligns with the selected outcome, which indicates that while price is likely to rise due to the combined