If Supply and Demand Both Decrease, the New Equilibrium Price

question 39

Multiple Choice

If supply and demand both decrease, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.

• A)lower; lower
• B)lower; uncertain
• C)higher; higher
• D)uncertain; lower

---

Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, helping businesses plan for various levels of performance.

Wells Serviced

This term refers to the number of oil or water wells that have undergone maintenance, repair, or inspection services within a specific period.

Other Expenses

Costs that are not directly associated with the production of goods or services, such as administrative and selling expenses.

Planning Budget

A budget created for a particular level of activity, it helps in setting goals and objectives for future financial plans.