Question 42
5 pts
Using a conventional demand and supply framework, answer the following question.
Both demand and supply decrease, but demand decreases less than supply. Then the new equilibrium point
lies to the ____ of the old equilibrium point, the equilibrium price ____ and the equilibrium
quantity ____.
(Hint: Draw the graph with the shifts and the directional arrows as we did in class. Do not forget
labelling.)
bottom right, decreases, decreases
bottom left, decreases, decreases
top right, increases, decreases.
top left, increases, decreases