The correct answer among the choices provided is the third option. Prices tend to rise if businesses cannot produce the quantity demanded by consumers. There will be changes in the competitive market according to the demand-pull theory. This will affect the valuation of new products.
Prices tend to rise if businesses cannot produce the quantity demanded by consumers is responsible for the inflation. Demand-pull Inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply.
The demand-pull theory of inflation asserts that inflation is caused by aggregate demand is outpacing aggregate supply and price levels are pushed up by this. This is described by the phrase "too much money spent on too few goods."