Question

is it possible for both demand and supply to decrease? what does that do to the...

is it possible for both demand and supply to decrease? what does that do to the equilibrim?
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

yes it is possible to decrease the demand and supply both. increase in taxation on personal income and decrease in subsidy for production respectively decrease income and demand both and decrease production and supply too.

these could be 3 conditions in which decrease in demand and decrease in supply wold be considered.

1. decrease in demand= decrease in supply= equilibrium price will be same but equilibrium quantity decrease.

2. decrease in demand> decrease in supply= both equilibrium price and quantity decrease

3. decrease in demand < decrease in supply = rise in equilibrium price & fall in equilibrium quantity.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that both demand and supply decrease and the new equilibrium price is higher than the...
Suppose that both demand and supply decrease and the new equilibrium price is higher than the initial equilibrium price. Which curve shifted more? a) Demand b) Supply c) Neither curve shifted d) The two curves shifted equally
Table: An Increase in Supply A Decrease in Supply An Increase in Demand A B A...
Table: An Increase in Supply A Decrease in Supply An Increase in Demand A B A Decrease in Demand C D Refer to the Table above: Which combination would produce an increase in equilibrium price and an indeterminate change in equilibrium quantity? Note: Start with a demand and supply curves and identify the initial equilibrium price and quantity. Then, change the demand and supply curves (indicated in the table) proportionally and identify the new equilibrium price and quantity. In some...
Consider a market that is in equilibrium. If it experiences both a decrease in demand and...
Consider a market that is in equilibrium. If it experiences both a decrease in demand and a decrease in supply, what can be said of the new equilibrium? The equilibrium: quantity will definitely fall, while the equilibrium price cannot be predicted. price and quantity will both rise. price and quantity will both fall. price will definitely fall, while the equilibrium quantity cannot be predicted.
Given supply, if Demand decreases, what happens to equilibrium price and output sales? If the decrease...
Given supply, if Demand decreases, what happens to equilibrium price and output sales? If the decrease in Demand is larger than increase in Supply, what happens to equilibrium price and output sales?
Show on graph (using the aggregate demand and aggregate supply model) the effects of: A decrease...
Show on graph (using the aggregate demand and aggregate supply model) the effects of: A decrease in aggregate demand/recession (show what happens both in the short run and in the long run and make sure you explain your results)
How does a decrease in the price of smart phones affect the demand for headphones? It...
How does a decrease in the price of smart phones affect the demand for headphones? It will likely increase a demand for headphones. It will likely decrease a demand for headphones. It will likely increase a supply of headphones. It should not have any effect on the headphone market.
4. If money supply and money demand both increase by same amount, what would be the...
4. If money supply and money demand both increase by same amount, what would be the effect on real GDP? a. Real GDP would decrease. b. Real GDP would increase c. Real GDP would not change. d. None of the above.
Take a simultaneous decrease in supply and demand curves and discuss what happens to the price...
Take a simultaneous decrease in supply and demand curves and discuss what happens to the price and quantity now. Be thorough in your explanations. Use graphs to help illustrate your answer.
An increase in interest rates will -decrease Aggregate Demand -increase Long run Aggregate Supply -decrease Long...
An increase in interest rates will -decrease Aggregate Demand -increase Long run Aggregate Supply -decrease Long run Aggregate Supply -increase Short run Aggregate Supply
4. What is wage and price stickiness? How does it impact Aggregate demand and Aggregate supply...
4. What is wage and price stickiness? How does it impact Aggregate demand and Aggregate supply in both the short and long run?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT