A television business commentator once explained the effects of an increase in demand for diet cola this way:

"The increase in demand would cause price to rise. The rise in price would then in turn cause supply to increase. The increase in supply would cause price to go back down, but that would then again increase demand, so price could go back up. In the end, we cannot tell whether price would go up, go down, or possibly stay the same."

Explain what, if anything, is correct about this answer. Explain what, if anything, is incorrect about this answer. "Explain" means state what is or is not correct, and why it is correct or incorrect. To explain why something is incorrect, you must do more than simply state it correctly.