Asked by Milton Hernandez on Jul 27, 2024
Verified
Consider the market for a good that is in equilibrium.Which of these is most likely to occur if both demand and supply for this good decrease during a particular point in time?
A) The equilibrium price will increase.
B) The equilibrium price will decrease.
C) The equilibrium quantity will increase.
D) The equilibrium quantity will decrease.
E) Both equilibrium price and quantity will increase.
Equilibrium Price
The price at which the quantity of goods supplied is equal to the quantity of goods demanded.
Equilibrium Quantity
The quantity of goods or services supplied is equal to the quantity demanded at the market price.
- Interpret market conditions to ascertain the effect of variations in supply and demand on the directional shift in equilibrium price and quantity.
Verified Answer
AS
Anthony SandovalJul 30, 2024
Final Answer :
D
Explanation :
If both demand and supply decrease, the equilibrium point will shift to a lower quantity and price, resulting in a decrease in the equilibrium quantity.
Learning Objectives
- Interpret market conditions to ascertain the effect of variations in supply and demand on the directional shift in equilibrium price and quantity.