If Demand Decreases and Supply Increases,then the

question 98

Multiple Choice

If demand decreases and supply increases,then the

• A)equilibrium quantity increases but the effect on the equilibrium price is unknown.
• B)equilibrium quantity decreases but the effect on the equilibrium price is unknown.
• C)equilibrium price falls but the effect on equilibrium quantity is unknown.
• D)equilibrium price rises but the effect on equilibrium quantity is unknown.
• E)effect on both equilibrium price and quantity is unknown.

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Definitions:

Aggregate Demand

The entire requirement for goods and services within an economy, valued at a fixed comprehensive price level during a set duration.

Short Run

In economics, a timeframe where at least one factor of production is considered fixed, limiting the firm's capacity to adjust fully to market changes.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy.

Price Level

A measure of the average prices of goods and services in the economy.