As the prices of homes rose across the United States in 2014, the number of homes offered for sale started to increase. Hint, a change in quantity demanded or quantity supplied of homes is a
movement along a curve resulting from a change in the price of homes.
A shift in the demand or supply of homes is a shift of the curve based on the factors discussed in chapter 3.
Finally, recall how equiibrium price and quantity are affected by shifts of one or both curves.
Choose the statement that explains this price increase.
A. As the supply of homes increases, the supply curve of homes shifts rightward and the
quantity of homes demanded increases. This fact illustrates the law of demand.
B. As the demand for homes increases, the demand curve for homes shifts rightward and
the quantity of homes supplied increases. This fact illustrates the law of demand.
C. As the demand for homes increases, the demand curve for homes shifts rightward and
the quantity of homes demanded increases. This fact illustrates the law of demand.
D. As the demand for homes increases, the demand curve for homes shifts rightward and
the quantity of homes supplied increases. This fact illustrates the law of supply.