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A decrease in demand causes the equilibrium price to

A. Rise

B. Fall

C. Remain constant

D. Indeterminate

Answer: Option B

Solution(By Examveda Team)

A decrease in demand causes the equilibrium price to Fall. A decrease in demand and an increase in supply will cause a fall in equilibrium price, but the effect on equilibrium quantity cannot be determined.

This Question Belongs to Commerce >> Economics

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Related Questions on Economics

Which among the following statement is INCORRECT?

A. On a linear demand curve, all the five forms of elasticity can be depicted

B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.

C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.

D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.