If we observe a rise in the equilibrium price and a decline in the equilibrium quantity, then which of the following must have happened?
A) Both demand and the supply must have increased.
B) Both demand and the supply must have decreased.
C) The demand increased while the supply remained unchanged.
D) The supply increased while the demand remained the same.
E) None of the above is correct.

Question

Quizplus · Accepted Answer

A rise in equilibrium price and a decline in equilibrium quantity suggests a decrease in supply while demand remains unchanged. None of the given options accurately describe this scenario.

If We Observe a Rise in the Equilibrium Price and a Decline