Question

The global demand for electric vehicles (EVs) has been steadily increasing due to growing environmental concerns and government incentives. However, the supply of lithium-ion batteries, a crucial component of EVs, has been facing constraints due to limited production capacity and supply chain disruptions. In this scenario, what is the most likely impact on the equilibrium price and quantity of EVs in the short run?

A Both price and quantity will increase.
B Both price and quantity will decrease.
C Price will increase, and quantity will decrease.
D Price will decrease, and quantity will increase.
E Price will increase, and the impact on quantity is uncertain.
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