Question

Suppose the demand for air travel decreases (as illustrated in the graph below). A decrease in demand _____ the equilibrium price for air travel and _____ the equilibrium quantity for air travel. decreases, decreases increases, increases decreases, increases

Answer 1

Answer:

decreases, decreases

Explanation:

• A decrease in the demand will create a fall in equilibrium prices and the quantity supplied will also decrease. As the equilibrium prices in the market are the price in which the quantity demanded equals to quantity supplied.  

• If the demand for the air decreases then the quantity of the air travel will also decrease and thus when the supply and demand change so do the changes associated with the equilibrium prices.