When supply decreases and demand does not change, the equilibrium quantity ________ and the equilibrium price ________.

Question

Quizplus · Accepted Answer

When supply decreases and demand remains constant, the equilibrium quantity decreases because there is less of the product available. The equilibrium price rises because the reduced supply, with unchanged demand, increases the price consumers are willing to pay.

When Supply Decreases and Demand Does Not Change, the Equilibrium