A decrease in demand causes the equilibrium price to _____ and the equilibrium quantity to _____.

Question

Quizplus · Accepted Answer

A decrease in demand means that there is less interest in the product, which leads to sellers having excess supply. To get rid of the surplus, sellers must lower the price, which ultimately causes the equilibrium price to fall. As demand decreases, so does the equilibrium quantity, as there will be less demand to match the sellers' new lower supply.

A Decrease in Demand Causes the Equilibrium Price to _____