Скачать или смотреть Investment Quiz | What happens when the demand rises for a good?

In a free market, the price of a good or service is primarily determined by the interaction of supply and demand. When the demand for a good or service is high, it typically leads to an increase in the price. This is because when more consumers want a particular product or service than the available quantity, sellers may raise prices to capitalize on the increased demand.

The basic economic principle at play here is the law of demand and supply. When demand exceeds supply, it creates a shortage, and in response to this shortage, sellers often raise prices to balance the market. Higher prices can act as a signal to producers to increase production and bring the market back into equilibrium over time.

Conversely, when the demand for a good or service decreases or when supply increases, it often leads to a decrease in price. In a free market, prices serve as a mechanism to allocate resources efficiently and guide the behavior of both consumers and producers.

You have guessed it. The correct answer is A.