If both demand and supply decrease, but the decrease in supply is greater than the decrease in demand, then the equilibrium price _____ and equilibrium output _____.

Question

Quizplus · Accepted Answer

When both demand and supply decrease, but the decrease in supply is greater than the decrease in demand, the equilibrium price rises due to the larger reduction in supply, and the equilibrium output falls because both demand and supply have decreased.

If Both Demand and Supply Decrease, but the Decrease in Supply