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

Question

Quizplus · Accepted Answer

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.

A Decrease in Demand and a Decrease in Supply Will