If the equilibrium quantity decreases while the equilibrium price increases, which of the following is the most likely reason?
A)Supply increases while demand decreases.
B)Supply increases while demand does not change.
C)Both supply and demand increase.
D)Both supply and demand decrease.
E)Neither supply nor demand changes.

Question

Quizplus · Accepted Answer

When the equilibrium quantity decreases while the equilibrium price increases, it suggests that both supply and demand decrease. This means that there is less of a product available and consumers are still willing to pay a higher price for it.

If the Equilibrium Quantity Decreases While the Equilibrium Price Increases