Question

The price of producing a $4 chocolate bar goes up, so the seller of the chocolate bar raises the price to $5. A student describes the effect on the demand for the chocolate, saying, "Since the price goes up, the quantity demanded will go up." Evaluate the student's answer.

Answer 1

The answer is correct because the student describes the effects of the law of supply correctly.
The answer is incorrect because the quantity demanded would go down.
The answer is correct because the student describes the effects of the law of demand correctly.
The answer is incorrect because the student does not mention supply.