Which of the following best describes the sequences of events that lead to a price increase and quantity decrease when supply decreases?
Choose 1
When supply decreases, there is a shortage because Qs > Qp at the old price. Price will
adjust upward until the market clears at a new lower quantity.
B
When supply decreases, there is a surplus because Qs > Op at the old price. Price will
adjust upward until the market clears at a new lower quantity.
When supply decreases, there is a shortage because Qs adjust upward until the market clears at a new lower quantity.
When supply decreases, there is a surplus because Qs < Qd at the old price. Price will
adjust upward until the market clears at a new lower quantity,