Suppose that the equilibrium price of French fries rises,while the equilibrium quantity falls.The most consistent explanation for these observations is
A) a decrease in the demand for French fries with no change in supply.
B) an increase in the demand for French fries with no change in supply.
C) an increase in the supply of French fries and an increase in the demand for French fries.
D) a decrease in the supply of French fries with no change in demand.
E) an increase in the supply of French fries with no change in demand.

Question

Quizplus · Accepted Answer

If the equilibrium price of French fries rises while the equilibrium quantity falls, it implies that there is a decrease in supply, which is reflected in the higher price. At the same time, there is no change in demand, as evidenced by the decrease in quantity demanded. Therefore, the correct choice is D, which describes a decrease in supply with no change in demand.

Suppose That the Equilibrium Price of French Fries Rises,while the Equilibrium