One observes that both the equilibrium price and the equilibrium quantity of coffee fall.Which of the following best fits the observed data?
A) An increase in demand with supply constant.
B) An increase in demand coupled with a decrease in supply.
C) An increase in demand coupled with an increase in supply.
D) A decrease in demand with supply constant.
E) An increase in supply with demand constant.

Question

Quizplus · Accepted Answer

A decrease in demand with supply constant would lead to a fall in both equilibrium price and quantity, as less coffee is demanded at every price level.

One Observes That Both the Equilibrium Price and the Equilibrium