4
lesson pretestMultiple Choice

Pretest

Question 4 • CMS 2026-2027 Economics and Personal Finance CREDIT RECOVERY

What happens when the demand for a product decreases but the supply increases?

Answer
A
The owner of a company fixes the price of the product.
B
The government allows companies to set the price of the product.
C
The price of the product increases due to high supply.
D
The price of the product decreases due to low demand.

Explanation

A decrease in demand puts downward pressure on price, and an increase in supply also puts downward pressure on price. Together, these changes make the product’s price decrease, so the best choice is “The price of the product decreases due to low demand.”

AI-written and checked against the verified answer.

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