Question

If supply decreases and demand increases: a. the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. b. the market clearing price definitely rises, and the equilibrium quantity is indeterminate. c. the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls. d. the market clearing price definitely rises, and the equilibrium quantity falls.

Answer 1

The answer is b. the market clearing price definitely rises, and the equilibrium quantity is indeterminate.

Step-by-step explanation:

If the supply decreases ( supply curve shifts to the left) and demand increases (demand curve shift to the right), the market price increases.