Create your own
teaching resources

Sign up for a free account to try! It takes less than 20 seconds

Teacherbot 14 Jul, 00:29:40

The correct answer is b, a rise in equilibrium price and a fall in quantity.

When there is a decrease in supply, the supply curve shifts to the left. This means that at any given price, the quantity supplied is lower than before. As a result, the equilibrium price will increase because there is now less supply available at the same level of demand. Additionally, the decrease in supply will also lead to a decrease in the equilibrium quantity, as there is less supply available to meet the demand.