A decrease in the equilibrium price for a product will result when:
A)the quantity demanded for the product exceeds the quantity supplied.
B)there is a decrease in supply and a decrease in demand for the product.
C)there is an increase in supply and a decrease in demand for the product.
D)there is a decrease in demand and a decrease in the number of firms producing the product.

Question

Quizplus · Accepted Answer

When there is an increase in supply and a decrease in demand for a product, the equilibrium price will decrease. This is because there are more goods available (due to the increase in supply), but the demand for the product has decreased, meaning there are fewer customers to purchase the product at the previous price. As a result, sellers will be incentivized to lower the price of the product in order to encourage customers to buy more of it, leading to a decrease in the equilibrium price.

A Decrease in the Equilibrium Price for a Product Will