Consider the market for capital equipment. Suppose the market price of firms' output decreases. Holding all else constant, the equilibrium quantity of capital equipment will

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Capital equipment is a factor of production that firms use to produce their goods and services. If the market price of firms' output decreases, their revenue will decrease, and they are likely to reduce their production. As a result, firms may decrease their demand for capital equipment since they need less equipment to produce a lower output quantity. This decrease in demand will shift the demand curve for capital equipment to the left, leading to a lower equilibrium quantity. Therefore, the equilibrium quantity of capital equipment will decrease.

Consider the Market for Capital Equipment