Suppose that for a given good demand increases and supply decreases at the same time.If demand increases by a lesser amount than supply decreases,then equilibrium price __________ and equilibrium quantity __________ for that good.
A) rises; falls
B) falls; falls
C) rises; rises
D) falls; rises

Question

Quizplus · Accepted Answer

When demand increases and supply decreases, the equilibrium price will rise due to increased competition among buyers and reduced availability of the good. The equilibrium quantity will fall because the decrease in supply, being greater than the increase in demand, leads to fewer transactions.

Suppose That for a Given Good Demand Increases and Supply