Question

The demand for automobiles is expected to decrease this year. Other things being equal, which of the following is the best forecast of the impact of this change in demand on the automobile market?

Select one:
a. An increase in the market equilibrium price and a decrease in the market equilibrium quantity of automobiles sold.

b. A decrease in the market equilibrium price and an increase in the market equilibrium quantity of automobiles sold.

c. A decrease in both the market equilibrium price and the market equilibrium quantity of autos sold.

d. An increase in both the market equilibrium price and market equilibrium quantity of autos sold.

Answer 1

A decrease in both the market equilibrium price and the market equilibrium quantity of autos sold.

Step-by-step explanation:

A fall in the demand for automobiles would shift the demand curve to the left.

As a result of the leftward shift, both equilibrium price and quantity would fall.

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