Suppose Supply Decreases Along a Given Demand Curve

question 71

Multiple Choice

Suppose supply decreases along a given demand curve.What would be expected to happen to equilibrium price and quantity?  

• A) An excess quantity demanded will be created, increasing the equilibrium price and causing equilibrium quantity to fall. 
• B) An excess quantity supplied will be created, lowering the equilibrium price and causing equilibrium quantity to rise. 
• C) An excess quantity demanded will be created, raising the equilibrium price and quantity. 
• D) An excess quantity supplied will be created, lowering the equilibrium price and quantity.

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Definitions:

Business Activities

Economic actions undertaken by a company, ranging from operational to financial transactions.

Income Statement

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

U.S. Adults

Individuals who are legally considered adults in the United States, typically age 18 and over, encompassing diverse demographics and backgrounds.

Married

The state of being united to a person as a spouse through legal, cultural, or religious ceremonies.