Suppose that demand decreases AND supply decreases.What would you expect to occur in the market for the good?

Question

Quizplus · Accepted Answer

When both demand and supply decrease, the equilibrium quantity will definitely decrease because there is less of the good being produced and demanded. However, the effect on price is ambiguous because the decrease in demand puts downward pressure on price (less is wanted at every price), while the decrease in supply puts upward pressure on price (less is available at every price).

Suppose That Demand Decreases AND Supply Decreases