Assume that consumers’ incomes and the number of sellers in

QUESTION
Q14) Assume that consumers’ incomes and the number of sellers in the market for good A both decrease. Based upon this information, we can conclude, with certainty, that the equilibrium:

Try again

Correct

Solution:
Based on the information given, we can conclude that both the equilibrium price and quantity will decrease.
This is because a decrease in consumers' incomes will lead to a decrease in demand for good A, which will lead to a decrease in both equilibrium price and quantity.
Similarly, a decrease in the number of sellers will lead to a decrease in supply for good A, which will also lead to a decrease in both equilibrium price and quantity.
Correct option is (d)

Chapter 4 Unit 3 questions