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When Supply Decreases and Demand Increases, What Happens to Equilibrium

Question 22

Multiple Choice

When supply decreases and demand increases, what happens to equilibrium price and quantity?


A) Price decreases, and quantity doesn't change.
B) Price increases, and quantity decreases.
C) Price increases; we don't know the effect on quantity without knowing which shift is larger.
D) Price decreases; we don't know the effect on the quantity without knowing which shift is larger.

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