A decrease in the equilibrium price for a product will result
A)when the quantity demanded for the product exceeds the quantity supplied.
B)when there is a decrease in supply and a decrease in demand for the product.
C)when there is an increase in supply and a decrease in demand for the product.
D)when 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 the product, the equilibrium price will decrease. This is because there is a greater amount of supply available in the market relative to the amount of demand, which creates downward pressure on prices. This is the only option that matches these conditions. A is incorrect because an excess in demand would result in an increase in price, not a decrease. B is incorrect because a decrease in both supply and demand would not necessarily result in a decrease in price, as it depends on the magnitude of each decrease. D is incorrect because a decrease in the number of firms producing the product would result in a decrease in supply, but not necessarily a decrease in price unless demand also decreased.

A Decrease in the Equilibrium Price for a Product Will