Question

Which statement explains why prices rise in a market?

Producers produce a quantity greater than consumers want to buy.
There is excess demand in the market.
Consumers buy much less of a good than they have in previous years.
New producers enter the market.

Answer 1

The correct answer is There is excess demand in the market

Demand means the amount of a good or service that consumers want to buy for a set price in a market. Demand can be interpreted as demand, but not necessarily as consumption, since it is possible to want and not to consume a good or service for various reasons.