A decrease in both equilibrium price and quantity could be produced by a(n)
A) decrease in supply,with demand constant
B) increase in supply,with demand constant
C) decrease in demand,with supply constant
D) increase in demand,with supply constant
E) improvement in technology

Question

Quizplus · Accepted Answer

A decrease in both equilibrium price and quantity can only happen when there is a decrease in demand, keeping supply constant. This would lead to excess supply, causing producers to lower the price and reduce the quantity supplied in the market. A decrease in supply, an increase in supply, an improvement in technology would either increase the price or increase the quantity supplied, leading to an increase in equilibrium price and quantity. An increase in demand would increase both equilibrium price and quantity.

A Decrease in Both Equilibrium Price and Quantity Could Be