Suppose There Is a Decrease in Both the Demand for and Supply

question 43

Multiple Choice

Suppose there is a decrease in both the demand for and supply of a good.What happens to equilibrium price and quantity?

• A) Equilibrium quantity increases, but the effect on equilibrium price is ambiguous.
• B) Equilibrium quantity decreases, but the effect on equilibrium price is ambiguous.
• C) Equilibrium price increases, but the effect on equilibrium quantity is ambiguous.
• D) Equilibrium price decreases, but the effect on equilibrium quantity is ambiguous.

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Definitions:

Active Listening

A communication technique used in sales and other contexts, involving fully concentrating, understanding, responding to, and remembering what is said.

Probing

The act of asking questions to gather more detailed information or clarify understanding.

Communication Process

The exchange of information, ideas, or feelings between two or more people through verbal, non-verbal, written, or electronic means, involving a sender, message, and receiver.

KISS Rule

A design principle that stands for "Keep It Simple, Stupid," suggesting that systems and models function best if they are kept simple rather than made complicated.