Equilibrium quantity must decrease when demand
A)increases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.
B)increases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
C)decreases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
D)decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.

Question

Quizplus · Accepted Answer

According to the law of demand, as price decreases, quantity demanded increases. Therefore, if demand decreases while supply stays the same, then the equilibrium quantity must decrease. Similarly, if both demand and supply decrease, the equilibrium quantity must also decrease. On the other hand, if demand increases and supply does not change or if demand does not change and supply increases, the equilibrium quantity will increase.

Equilibrium Quantity Must Decrease When Demand