Following Adjustments to a New Equilibrium in a Market, the Market

question 233

Multiple Choice

Following adjustments to a new equilibrium in a market, the market clearing price remains unchanged, but the equilibrium quantity is now lower. Which of the following could definitely have caused this outcome?

• A) Demand and supply both increased.
• B) Demand and supply both decreased.
• C) Demand increased, and supply decreased.
• D) Demand decreased, and supply increased.

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Definitions:

Recorded Equity

The total amount of owners' equity recorded in the financial statements, representing the residual interest in the assets of a company after deducting liabilities.