Question
Download Solution PDFWhat effect will a decrease in demand and an increase in supply have on equilibrium price?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is option 1, i.e. Equilibrium price will fall.
Key Points
- A decrease in demand and an increase in supply will cause a fall in Equilibrium price.
- Equilibrium is a state of no change and clearly, at the equilibrium price, both buyers and sellers are in a state of no change.
- Technically, at the equilibrium price, the quantity demanded by the buyers is equal to the quantity supplied by the sellers.
- The equilibrium price is determined by the market forces of demand and supply in a perfectively competitive market.
- Market Demand is the sum total of demand for a commodity by all the buyers in the market whereas Market Supply is the sum total of supplies of a commodity by all the firms in the market.
Last updated on Jul 21, 2025
-> NTA has released UGC NET June 2025 Result on its official website.
-> SSC Selection Post Phase 13 Admit Card 2025 has been released at ssc.gov.in
-> The SSC CGL Notification 2025 has been announced for 14,582 vacancies of various Group B and C posts across central government departments.
-> The SSC CGL Tier 1 exam is scheduled to take place from 13th to 30th August 2025 in multiple shifts.
-> Candidates had filled out the SSC CGL Application Form from 9 June to 5 July, 2025. Now, 20 lakh+ candidates will be writing the SSC CGL 2025 Exam on the scheduled exam date. Download SSC Calendar 2025-25!
-> In the SSC CGL 2025 Notification, vacancies for two new posts, namely, "Section Head" and "Office Superintendent" have been announced.
-> Candidates can refer to the CGL Syllabus for a better understanding of the exam structure and pattern.
-> The CGL Eligibility is a bachelor’s degree in any discipline, with the age limit varying from post to post.
-> The SSC CGL Salary structure varies by post, with entry-level posts starting at Pay Level-4 (Rs. 25,500 to 81,100/-) and going up to Pay Level-7 (Rs. 44,900 to 1,42,400/-).
-> Attempt SSC CGL Free English Mock Test and SSC CGL Current Affairs Mock Test.
-> NTA has released the UGC NET Final Answer Key 2025 June on its official website.