A decrease in demand alone would cause a decrease in price, but an increase in supply alone would also cause a decrease in price. The correct choice is D because a combination of both a decrease in demand AND an increase in supply would lead to a greater decrease in price.

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If Price Declines

Question 143

Multiple Choice

If price declines,

A) there may have been an increase in supply.
B) there may have been a decrease in demand.
C) there may have been a decrease in supply.
D) there may have been an increase in supply AND a decrease in demand.
E) there may have been a decrease in demand AND a decrease in supply.

Correct Answer: