Suppose Z is a normal good.The equilibrium price and equilibrium quantity of Z in the year 2013 was $25 and 60 units,respectively.In 2017,the equilibrium price of Z had decreased to $15 and the equilibrium quantity had also decreased to 50 units.Other things remaining the same,which of the following could explain this change?

Question

Quizplus · Accepted Answer

Since Z is a normal good, a decrease in equilibrium quantity paired with a decrease in equilibrium price suggests a decrease in demand. Therefore, a leftward shift of the demand curve for Z is the most likely explanation. A shift in the supply curve cannot explain a decrease in both equilibrium price and equilibrium quantity, as it would only result in a decrease in equilibrium price if there was a rightward shift of the supply curve, and an increase in equilibrium quantity.

Suppose Z Is a Normal Good