A decrease in demand leads to a (an):

Question

Quizplus · Accepted Answer

According to the law of demand, a decrease in demand leads to a decrease in equilibrium price and quantity. When demand decreases, there is now more supply available than buyers willing to purchase, which creates a surplus. In order to sell the surplus, sellers must reduce the price, which leads to a decrease in equilibrium price. As the price decreases, fewer sellers are willing to produce the good or service, resulting in a decrease in equilibrium quantity.

A Decrease in Demand Leads to a (An)