Holding supply constant, a reduction in demand leads to
A) lower prices and higher quantity supplied.
B) lower prices and lower quantity supplied.
C) higher prices and higher quantity supplied.
D) higher prices and lower quantity supplied.

Question

Quizplus · Accepted Answer

When demand decreases while supply remains constant, the price decreases because sellers are willing to accept less to sell their products. This leads to a lower quantity supplied as producers adjust to the lower price level.

Holding Supply Constant, a Reduction in Demand Leads to