From the position of stable equilibrium, the market supply of a commodity decreases, while the market demand remains unchanged, then:
A)equilibrium price falls
B)equilibrium quantity rises
C)both equilibrium price and equilibrium quantity decreases
D)equilibrium price rises, but equilibrium quantity falls

Question

Quizplus · Accepted Answer

When the market supply of a commodity decreases while demand remains unchanged, the equilibrium price rises due to increased scarcity of the commodity. However, the equilibrium quantity falls because there is less of the commodity available for sale.

From the Position of Stable Equilibrium, the Market Supply of a Commodity