How do changing prices affect supply and demand?

as price increases, both supply and demand increase.
as price decreases, both supply and demand decrease.
as price increases, supply decreases, but demand increases.
as price decreases, supply decreases, but demand increases.

The right answer is D. As price decreases, supply decreases, but demand increases.

Price is what the producer receives by selling a unit of a product or service. An increase in price almost always leads to an increase in the quantity of the good or service offered, while a fall in price will decrease the quantity offered.  When the price of gasoline rises, for example, this encourages profit-seeking companies to perform various actions to expand the exploration of oil reserves, drill more oil wells, invest in more pipelines and oil tankers to bring the oil to the facilities where it will be refined in the form of gasoline, build new oil refineries, buy additional pipelines and trucks to bring gas to gas stations, open more gas stations or keep current stations open for longer hours. In which a higher price leads to a higher offered quantity and a lower price leads to a smaller offered quantity.

a. always outside of government control.