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Today, 01:27

If supply increases while demand decreases

A. the equilibrium quantity will definitely increase.

B. the equilibrium price will definitely decrease.

C. the equilibrium quantity will definitely decrease.

D. the equilibrium price will definitely increase.

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Answers (1)
  1. Today, 02:21
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    C. the equilibrium quantity will definitely decrease.

    B. the equilibrium price will definitely decrease.

    Explanation:

    Even though there is a great supply, but if the desire to have it decreases that is the demand for such product decreases, the equilibrium quantity will definitely decrease.

    This is because the demand is low, accordingly the quantity of supply will be decreased to reach the equilibrium.

    As there is increase in supply and decrease in demand, thus, in order to reach the equilibrium the price will be decreased so that people might demand more on low price.

    Accordingly decrease in price and decrease in equilibrium quantity is obvious.
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