Without the aid of a graph,one can say definitively that,if supply decreases while demand increases simultaneously,the new equilibrium price is ___________ and the new equilibrium quantity is _________________.
A) lower;lower
B) lower;indeterminate
C) indeterminate;higher
D) indeterminate;lower
E) higher;indeterminate

Question

Quizplus · Accepted Answer

When supply decreases, it tends to increase the equilibrium price, while an increase in demand also tends to increase the equilibrium price. Therefore, the new equilibrium price is higher. However, the effect on equilibrium quantity is indeterminate because a decrease in supply tends to decrease quantity, while an increase in demand tends to increase quantity.

Without the Aid of a Graph,one Can Say Definitively That,if