If equilibrium price increases while equilibrium quantity decreases, then we know that:
A) market demand has increased.
B) market demand has decreased.
C) market supply has decreased.
D) market supply has increased.

Question

Quizplus · Accepted Answer

A decrease in market supply leads to a higher equilibrium price and a lower equilibrium quantity, as there is less of the good available at any given price.

If Equilibrium Price Increases While Equilibrium Quantity Decreases, Then We