If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:

Question

Quizplus · Accepted Answer

When market supply decreases and demand simultaneously increases, the market price will increase, as there is more demand for the same amount of supply. However, the quantity exchanged could increase, decrease, or remain the same depending on the magnitude of the change in supply and demand. If the increase in demand is greater than the decrease in supply, the quantity exchanged will increase. If the decrease in supply is greater than the increase in demand, the quantity exchanged will decrease. If the changes in supply and demand are relatively equal, the quantity exchanged will remain the same.

If Market Supply Decreases And, Simultaneously, Market Demand Increases, the New