Question

If the demand for a product decreases, we would expect a equilibrium price and equilibrium quantity to both decrease. b equilibrium price and equilibrium quantity to both increase. c equilibrium price to decrease and equilibrium quantity to increase. d equilibrium price to increase and equilibrium quantity to decrease.

Answer 1

Answer:

a. Equilibrium price and equilibrium quantity to both decrease.

Explanation:

When the demand of a product decreases, it generates an excess supply at the initial price and this will generate the price to decrease. When the price goes down, suppliers are not willing to sell the same amount of products which will cause a decrease in the quantity.