Suppose that both supply and demand for iPads decrease. One can predict that the:
A)equilibrium price will rise but the equilibrium quantity can increase or decrease.
B)equilibrium price and quantity will decrease.
C)equilibrium price and quantity will rise.
D)equilibrium quantity will fall but the equilibrium price can rise or fall.

Question

Quizplus · Accepted Answer

When both supply and demand decrease, the equilibrium quantity will definitely fall. However, the change in equilibrium price is uncertain because it depends on the relative magnitudes of the shifts in supply and demand.

Suppose That Both Supply and Demand for IPads Decrease