A decrease in demand will cause a decrease in price, which will cause a decrease in supply.

Question

Quizplus · Accepted Answer

A decrease in demand will cause a decrease in price, but this does not necessarily cause a decrease in supply. Supply is determined by producers' willingness and ability to produce goods at different prices, which is influenced by factors such as production costs, technology, and expectations, not directly by demand.

A Decrease in Demand Will Cause a Decrease in Price