Question

In the market for some good, demand decreases and supply decreases. What prediction would you make for this market?
Select one:
a. Quantity falls.

b. Quantity rises.

c. Price rises.

d. Price falls.

Answer 1

When both demand and supply decreases, that means consumers want to buy less and suppliers want to produce less, that means output(quantity) will fall. The effect of price cannot is dependent on the changes in demand and supply. So it’s safe to predict that the market for that good will experience a FALL IN QUANTITY.