When decrease in demand is equal to increase in supply, equilibrium quantity will ___________.

rise

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fall

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remain unchanged

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be zero

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Solution

The correct option is C remain unchanged
When there is decrease in demand and increase in supply the demand curve moves to the left from DD to D1D1 and the supply curve shifts to the right from SS to S1S1. So, at the new equilibrium point the quantity is not changed but the price will decrease from P to P1 because supply is increased and demand is reduced.

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