If the supply of a product decreases,then we would expect equilibrium price
A)to increase and equilibrium quantity to decrease.
B)to decrease and equilibrium quantity to increase.
C)and equilibrium quantity to both increase.
D)and equilibrium quantity to both decrease.

Question

Quizplus · Accepted Answer

According to the law of supply and demand, when the supply of a product decreases, the demand for the product remains constant, and there is a shortage of the product. Therefore, the equilibrium price will increase as buyers will be willing to pay a higher price to obtain the reduced quantity of the product. At the same time, equilibrium quantity will decrease as sellers will produce and offer less of the product due to the decrease in supply.

If the Supply of a Product Decreases,then We Would Expect