What happens to the market equilibrium when the demand decreases?

Equilibrium price increases

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Equilibrium price decreases

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Equilibrium quantity increases

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Equilibrium quantity decreases

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

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Solution

The correct options are
B Equilibrium price decreases
D Equilibrium quantity decreases
When demand decreases, the market is no longer at equilibrium. The quantity supplied exceeds the quantity demand, leading to excess supply and decrease in prices. This would cause a downward movement along the supply curve. Hence, both equilibrium price and quantity decrease.

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Similar questions

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