-A Decrease in Supply Will Have What Effect on Equilibrium

question 177

Multiple Choice

-A decrease in supply will have what effect on equilibrium price and quantity?

• A)Price will increase; quantity will decrease.
• B)Price will decrease; quantity will increase.
• C)Both price and quantity will increase.
• D)Both price and quantity will decrease.

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Definitions:

Novation

The act of replacing an obligation to perform with a new obligation, or substituting a new party into an existing contract.

Successive Assignments

The process of transferring rights or duties from one party to another over a series of transactions.

Obligor

The party in a contractual agreement who is bound or obligated to perform a duty or payment to the obligee.

Assignee

A person or entity to whom rights or interests have been transferred by another, usually under the terms of a contract.