-A decrease in supply will have what effect on equilibrium price and quantity?
A)Price will increase; quantity will decrease.
B)Price will decrease; quantity will increase.
C)Both price and quantity will increase.
D)Both price and quantity will decrease.

Question

-A decrease in supply will have what effect on equilibrium price and quantity?
A)Price will increase; quantity will decrease. 
B)Price will decrease; quantity will increase. 
C)Both price and quantity will increase. 
D)Both price and quantity will decrease.

Quizplus · Accepted Answer

A decrease in supply, all else being equal, leads to an increase in price due to scarcity and a decrease in quantity because there is less of the good available for sale.

-A Decrease in Supply Will Have What Effect on Equilibrium