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:

Quadrant A

A section of a Cartesian plane divided by the X and Y axes, used in mathematics and business to represent different categories or segments.

Strength

The capacity to withstand force or stress; often used to describe the robustness of materials, structures, or character.

Threat

A warning or indication of a possible danger, harm, or adverse condition.

Market Segment

A group of potential customers with similar needs, characteristics, or behaviors who might require separate products or marketing mixes.