If the demand for a product decreases and the supply of the same product decreases, the equilibrium price will decrease.

Question

Quizplus · Accepted Answer

When both demand and supply decrease, the equilibrium price cannot be predicted solely based on this information. It will depend on the degree of decrease in both demand and supply. If the decrease in demand is greater than the decrease in supply, the equilibrium price will decrease. If the decrease in supply is greater than the decrease in demand, the equilibrium price will increase. If the decrease in both is equal, the equilibrium price will remain the same.

If the Demand for a Product Decreases and the Supply