Question

The market price of airline flights increased recently. Some economists suggest that the price increased because several airlines went out of business. They believe that, in the market for flights:
a. demand increased.
b. supply increased.
c. demand decreased.
d. supply decreased.

Answer 1

Answer: d. supply decreased

Explanation:

Airlines are the suppliers while people who book flights create demand. If several airlines leave the industry, supply would fall and there would be excess demand over supply which would cause the price of flights to rise.

I hope my answer helps you.