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If supply decreases but demand remains the same, we can conclude that the new equilibrium: a....

If supply decreases but demand remains the same, we can conclude that the new equilibrium:

a. Price must fall but market quantity is indeterminate.

   b. Quantity must increase but market price is indeterminate.

   c. Price must increase but market quantity is indeterminate.

   d. Quantity must decrease but market p rice is indeterminate.

   e. Price must increase and Quantity must increase.

     f.   Price must increase and quantity must decrease.

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Answer #1

Ans - f

If the supply decreases and demand remaims the same then new equilibrium will be restored where the price must increase and quantity must decrease. The decrease in supply in the market while keeping the damand constant will reduces the quantity in the market so that the with the given demand there will be less supply which put puts pressure on the price level so that price must increases.

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