If both market demand and supply decrease simultaneously, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____.
A)increase; increase
B)indeterminate; decrease
C)decrease; indeterminate
D)decrease; decrease

Question

If both market demand and supply decrease simultaneously, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____.
A)​increase; increase
B)​indeterminate; decrease
C)​decrease; indeterminate
D)​decrease; decrease

Quizplus · Accepted Answer

When both market demand and supply decrease simultaneously, the equilibrium quantity will definitely decrease because there is less of the good being supplied and demanded. However, the effect on equilibrium price is indeterminate without knowing the relative magnitudes of the shifts in demand and supply.

If Both Market Demand and Supply Decrease Simultaneously, Then Equilibrium