Suppose Demand Decreases and Supply Decreases

question 132

Multiple Choice

Suppose demand decreases and supply decreases.Which of the following will happen?

• A)equilibrium price will increase
• B)equilibrium price will decrease
• C)equilibrium quantity will increase
• D)equilibrium quantity will decrease
• E)neither the equilibrium price nor the quantity will change

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Definitions:

Profit Margin

The ratio of net income to revenue, indicating how much profit is made on average from sales.

Authority

The authority or capability to issue commands, make choices, and ensure compliance.

Decision

The act or process of choosing a particular action among various alternatives based on the expected outcomes.

Residual Income

The income that remains after deducting all costs, expenses, and taxes from total revenues.