When the demand for a good decreases,its equilibrium price ________ and equilibrium quantity ________.
A) falls; decreases
B) falls; increases
C) rises; decreases
D) rises; increases
E) falls; does not change

Question

Quizplus · Accepted Answer

When the demand for a good decreases, there is excess supply in the market which leads to a fall in the equilibrium price. As the demand is low, producers reduce the supply which also leads to a decrease in the equilibrium quantity. Therefore, the correct choice is A) falls; decreases.

When the Demand for a Good Decreases,its Equilibrium Price ________