What occurs when there is an increase in demand for a good?

When there is an increase in demand for a good, it typically leads to a rise in the price of that good. Demand increases when consumers are willing to buy more of a product at various price levels, which shifts the demand curve to the right. As the demand for the good rises, suppliers notice that consumers are willing to pay more, prompting them to raise their prices in response to this heightened demand.

This price increase continues until a new equilibrium is reached, where the quantity supplied matches the new, higher quantity demanded at that elevated price level. Therefore, the relationship between demand and price is a fundamental principle in economics, illustrating how demand influences pricing in a market setting.

The other options do not accurately reflect the dynamics of supply and demand. For instance, supply does not decrease simply because demand increases; in fact, producers may increase the supply in response to higher prices. Additionally, the quantity supplied remains relevant as it determines how much of the good is available at different price points, and the equilibrium price typically changes rather than staying the same when there is an increase in demand.