Consider the market for wheat that is initially in equilibrium.In which of the following situations will the equilibrium price of wheat increase and the change in the equilibrium quantity of wheat be indeterminate?

Question

Consider the market for wheat that is initially in equilibrium.In which of the following situations will the equilibrium price of wheat increase and the change in the equilibrium quantity of wheat be indeterminate?​

Quizplus · Accepted Answer

C) If supply declines and demand rises, the equilibrium price of wheat will increase because the decrease in supply would push prices up, and the increase in demand would further push prices up. The change in the equilibrium quantity is indeterminate because the decrease in quantity due to lower supply and the increase in quantity due to higher demand work in opposite directions, making the net effect on quantity unclear without more information.

Consider the Market for Wheat That Is Initially in Equilibrium