[amp_mcq option1=”Rise” option2=”Fall” option3=”Remain constant” option4=”Indeterminate” correct=”option2″]<\/p>\n
The correct answer is B. Fall.<\/p>\n
A decrease in demand means that consumers are willing and able to buy less of a good or service at any given price. This causes the demand curve to shift to the left, as shown in the diagram below.<\/p>\n
[Diagram of a demand curve shifting to the left]<\/p>\n
The equilibrium price is the price at which the quantity demanded equals the quantity supplied. When the demand curve shifts to the left, the equilibrium price falls. This is because at the old equilibrium price, there is now excess supply of the good or service. Producers will lower their prices in order to sell their goods, and the price will continue to fall until the quantity demanded equals the quantity supplied.<\/p>\n
Option A is incorrect because a decrease in demand causes the equilibrium price to fall, not rise. Option C is incorrect because the equilibrium price will change, not remain constant. Option D is incorrect because the change in the equilibrium price is determinate, not indeterminate.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Rise” option2=”Fall” option3=”Remain constant” option4=”Indeterminate” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-54812","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n