A decrease in the equilibrium price in a purely competitive market:
A) shifts the demand curve for the individual seller's product upward.
B) shifts the demand curve for the individual seller's product to the left.
C) means that each seller's average total cost curve automatically shifts downward.
D) could be caused by a decrease in market demand or an increase in market supply.

Question

Quizplus · Accepted Answer

A decrease in the equilibrium price in a purely competitive market could indeed be caused by a decrease in market demand (less desire for the product at previous prices) or an increase in market supply (more of the product is available, which can push prices down). Choices A, B, and C do not directly cause a decrease in equilibrium price; they relate to other aspects of market dynamics.

A Decrease in the Equilibrium Price in a Purely Competitive