Asked by Grace Gallagher on May 02, 2024
Verified
A decrease in demand and a decrease in supply will lead to a(n) _____ in equilibrium quantity and a(n) _____ in equilibrium price.
A) decrease;indeterminate change
B) indeterminate change;increase
C) indeterminate change;decrease
D) increase;indeterminate change
Equilibrium Quantity
The quantity of goods or services supplied that is equal to the quantity demanded at the market price.
Equilibrium Price
The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, resulting in no surplus or shortage.
- Conceive the impact of supply and demand shifts on the equilibrium metrics of price and quantity.
- Analyze the impact on market outcomes caused by shifts in supply and demand.
Verified Answer
ZI
Zakiyyah IbrahimMay 05, 2024
Final Answer :
A
Explanation :
When both demand and supply decrease, the equilibrium quantity will definitely decrease because there is less of the good being demanded and supplied. The change in equilibrium price is indeterminate without knowing the relative magnitudes of the shifts in demand and supply.
Learning Objectives
- Conceive the impact of supply and demand shifts on the equilibrium metrics of price and quantity.
- Analyze the impact on market outcomes caused by shifts in supply and demand.
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