Question

Assume that consumers' incomes and the number of sellers in the market for good A (a normal good) both decrease. Based upon this information we can conclude, with certainty, that equilibrium:

price will increase.
quantity will increase.
price will decrease.
quantity will decrease.

Answer 1

quantity will decrease.

Step-by-step explanation:

Equilibrium quantity occurs when the supply for a product equals the demand for the same product. In other, there is an intersection between demand and supply; the amount of customers who want to purchase a product equals the amount of suppliers available to supply the product. Therefore, when the demand and supply changes equally, the equilibrium quantity also changes.

According to the question, since the demand and supply both decreased, we can conclude that the equilibrium quantity will decrease