The demand for a good decreases by 10 percent and the supply of the good decreas
ID: 1221870 • Letter: T
Question
The demand for a good decreases by 10 percent and the supply of the good decreases by 8 percent. The price of the good because. A. Falls; when demand decreases or supply decreases the price falls B. Falls: demand decreases by more than supply decreases and when demand decreases the price falls C. Rises; when demand decreases or supply decreases the price rises D. Rises: demand decreases by more than supply decreases and when demand decreases the price rises E. Either rises or falls: demand decreases and supply decreasesExplanation / Answer
% decrease in demand is higher than percentage decrease in qty supplied that means demand has decreased. And when demand decreases , prices fall.
OPTION B
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