When Demand Decreases and Supply Does Not Change, the Equilibrium

question 472

Multiple Choice

When demand decreases and supply does not change, the equilibrium price and the equilibrium quantity .

• A) rises; increases
• B) rises; decreases
• C) falls; increases
• D) falls; decreases

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, culminating in net income or loss.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted.

Variable Cost

A cost that changes in proportion to the level of activity or volume of production in a business.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales.