In which instance can we observe a rise in the equilibrium price accompanied by a decline in the equilibrium quantity?

If both demand and supply decline, but the decline in demand exceeds the decline in supply

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If supply declines while demand increases, and the decline in supply exceeds the increase in demand

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If both demand and supply increase

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None of the above

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Solution

The correct option is B
If supply declines while demand increases, and the decline in supply exceeds the increase in demand

If supply declines while demand increases, and the decline in supply exceeds the increase in demand.

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In which instance will both the equilibrium price and quantity rise?

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When both demand and supply increase, the equilibrium quantity rises but the change in equilibrium price is ambiguous.

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In which instance can we observe a rise in the equilibrium price accompanied by a decline in the equilibrium quantity?

The correct option is B If supply declines while demand increases, and the decline in supply exceeds the increase in demand If supply declines while demand increases, and the decline in supply exceeds the increase in demand.

The correct option is B
If supply declines while demand increases, and the decline in supply exceeds the increase in demand

If supply declines while demand increases, and the decline in supply exceeds the increase in demand.