The Following Questions Refer to the graph below.
-Which of the following statements is incorrect?
A)If supply decreases and demand remains constant,equilibrium price will rise
B)If demand decreases and supply increases,equilibrium price will rise
C)If supply increases and demand decreases,equilibrium price will fall
D)If demand increases and supply decreases,equilibrium price will rise
E)If supply is constant and demand increases,price will rise

Question

The Following Questions Refer to the graph below. 
-Which of the following statements is incorrect?
A)If supply decreases and demand remains constant,equilibrium price will rise 
B)If demand decreases and supply increases,equilibrium price will rise 
C)If supply increases and demand decreases,equilibrium price will fall 
D)If demand increases and supply decreases,equilibrium price will rise 
E)If supply is constant and demand increases,price will rise

Quizplus · Accepted Answer

If demand decreases and supply increases, equilibrium price will actually fall. This is because the increased supply will lead to a surplus of the good, pushing sellers to lower their prices in order to sell off their excess inventory.

The Following Questions Refer to the Graph Below