If both the supply of and the demand for a good decrease simultaneously, 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 supply and demand decrease, if the decrease in supply is greater than the decrease in demand, the equilibrium price will rise due to the relative scarcity of the good. However, the equilibrium output will fall because both the supply and demand curves have shifted to the left, indicating a lower quantity being bought and sold in the market.

If Both the Supply of and the Demand for a Good