Which of the following scenarios best describes the change in the equilibrium shown in the accompanying graph?

A) firms entering the market
B) firms leaving the market
C) buyers entering the market
D) buyers leaving the market
E) an input cost decreasing

Question

Which of the following scenarios best describes the change in the equilibrium shown in the accompanying graph?

A) firms entering the market 
B) firms leaving the market 
C) buyers entering the market 
D) buyers leaving the market 
E) an input cost decreasing

Quizplus · Accepted Answer

The equilibrium price decreases and the equilibrium quantity decreases, which suggests that there has been a decrease in demand or an increase in supply. The only option that fits this description is firms leaving the market, as this would cause a decrease in supply and a shift to the left in the supply curve, resulting in a lower equilibrium quantity and price.

Which of the Following Scenarios Best Describes the Change in the Equilibrium