An ambiguous change in price and a decrease in quantity are most likely caused by:
A)no shift in supply and a shift to the left in demand.
B)a shift to the left in supply and a shift to the left in demand.
C)a shift to the right in supply and a shift to the left in demand.
D)a shift to the left in supply and a shift to the right in demand.

Question

Quizplus · Accepted Answer

An ambiguous change in price means that it could be caused by either a shift in supply or demand or a combination of both. However, the decrease in quantity implies that there is a decrease in demand. Therefore, the only option that fits this scenario is a shift to the left in supply and a shift to the left in demand, which is option B.

An Ambiguous Change in Price and a Decrease in Quantity