We can be sure that the equilibrium price will fall when:
A)supply and demand both increase.
B)supply and demand both decrease.
C)supply increases and demand decreases.
D)supply decreases and demand increases.

Question

We can be sure that the equilibrium price will fall when:
A)​supply and demand both increase.
B)​supply and demand both decrease.
C)​supply increases and demand decreases.
D)​supply decreases and demand increases.

Quizplus · Accepted Answer

When supply increases and demand decreases, there will be a surplus of goods. Suppliers will have to lower the price to sell their excess supply, which will lead to a decrease in equilibrium price.

We Can Be Sure That the Equilibrium Price Will Fall