A decrease in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibrium price.

Question

BlackTom AI · Accepted Answer

To approach this question, I will assess how simultaneous shifts in both demand and supply affect the equilibrium.
Option a: increase; indeterminate change. An increase in equilibrium quantity would require the combined shifts to raise the quantity traded. Since demand decreases, it tends to reduce quantity demanded, not increase it. This makes an overall increase in equilibrium quantity unlikely. Hence this option is incorrect.
Option b: indeterminate change; increase. A price increase would usually accompany a leftward shift in supply or a rightward shift in demand; here both demand and supply shift left (decrease). The demand decrease tends to lower quantity demanded and put downward pressure on price, while the supply decrease reduces quantity supplied and tends to raise price. These opposing effects on price make the net change in price indeterminate, but the quantity is still unlikely to rise because demand has fallen. Therefore this option is also incorrect on the quantity part and partially incorrect on price.
Option c: indeterminate change; decrease. The price change is indeterminate due to offsetting effects, which matches the general intuition for price when both curves shift left. However, the equilibrium quantity typically declines when both demand and supply decrease since each curve moves to the left, reducing the amount traded at the intersection. While there could be edge cases where the magnitude and slopes align to keep quantity unchanged, those are special cases rather than the general outcome. This makes the “indeterminate” for quantity inaccurate in standard analysis. This option is not the best fit.
Option d: decrease; indeterminate change. This option asserts a clear decrease in equilibrium quantity, which aligns with the standard result: shifting both curves left reduces the quantity traded. It also correctly states that the equilibrium price becomes indeterminate because the relative magnitudes of the shifts determine whether price rises, falls, or stays the same. This combination matches the typical outcome in introductory supply-and-demand analysis.
Option e: no change; no change. With both curves moving left, it is highly unlikely that both quantity and price would remain unchanged; at least the quantity is expected to move, so this option is incorrect.

A decrease in demand and a decrease in supply, will lead to a(n) in equilibrium quantity and a(n) in equilibrium price.单项选择题

类似问题

You own a bond that pays $64 in interest annually. The face value is $1,000 and the current market price is $1,021.61. The bond matures in 11 years. What is the yield to maturity?

Which of the following statements is CORRECT?

It will cost $9,600 to acquire an ice cream cart that is expected to produce cash inflows of $3,600 a year for three years. After the three years, the cart is expected to be worthless. What is the payback period?

A 3.25 percent Treasury bond is quoted at a price of 99.04. The bond pays interest semiannually. What is the current yield?

更多留学生实用工具

智能学习助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单

A decrease in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibrium price.单项选择题