An Increase in Supply and a Decrease in Demand Occur

question 32

Multiple Choice

An increase in supply and a decrease in demand occur in a market. What happens to the equilibrium price and quantity?

• A) The equilibrium price decreases; the change in the equilibrium quantity is ambiguous.
• B) The equilibrium price decreases; the equilibrium quantity increases.
• C) The equilibrium price increases; the change in the equilibrium quantity is ambiguous.
• D) The equilibrium price increases; the equilibrium quantity decreases.

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