Multiple Choice
An increase in supply and a decrease in demand occur in a market. What happens to the equilibrium price and quantity?
A) The equilibrium price decreases; the change in the equilibrium quantity is ambiguous.
B) The equilibrium price decreases; the equilibrium quantity increases.
C) The equilibrium price increases; the change in the equilibrium quantity is ambiguous.
D) The equilibrium price increases; the equilibrium quantity decreases.
Correct Answer:
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