If the equilibrium price decreases and the equilibrium output increases then what must have happened?
a. Demand decreased
b. Supply decreased
c. Supply increased
d. None of these because an increase in output would not happen if price increases
e. Demand Increased
Answer: c. Supply increased
Market equilibrium is a situation in which quantity demanded is equal to quantity supplied. Increase in supply will cause decrease in equilibrium price and increase in equilibrium output.
In the above diagram, DD is the demand curve and SS is the supply curve. E is the market equilibrium where demand is equal to supply. Increase in supply will shift the supply curve to the right from SS to S1S1. This leads to a decrease in equilibrium price from P to P1 and increase in equilibrium output from Q to Q1. E1 is the new market equilibrium (Point where DD and S1S1 meets)
If the equilibrium price decreases and the equilibrium output increases then what must have happened? a....
If the supply (level) of RNs decreases, and the level of demand for healthcare increases, what will happen to the equilibrium price and quantity? a. Price will increase and quantity will increase. b. Price will increase and quantity will decrease. c. Price will increase and quantity will be indeterminate d. Price will be indeterminate and quantity will decrease. e. None of the above.
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