If the demand and supply curves for product X are stable,a government-mandated increase in the price of X will:

A) increase the supply of X and decrease the demand for X.
B) increase the demand for X and decrease the supply of X.
C) increase the quantity supplied of X and decrease the quantity demanded of X.
D) decrease the quantity supplied of X and increase the quantity demanded of X.

Question

Reham Al-odeel · Accepted Answer

Final Answer : C, Explanation :  A government-mandated increase in the price of product X will lead to an increase in the quantity supplied (as suppliers are willing to supply more at a higher price) and a decrease in the quantity demanded (as consumers are less willing to buy the product at a higher price). This does not change the supply and demand curves themselves, but rather moves along them to a new equilibrium point.

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