Question

1. What will happen to the equilibrium quantity and price of a product in a competitive market when the increase in demand exactly offsets the decrease in supply?

A)Equilibrium quantity will increase and equilibrium price will decrease

B)Equilibrium quantity will decrease and equilibrium price will increase

C)Equilibrium quantity will increase and equilibrium price will stay the same

D)Equilibrium quantity will stay the same and equilibrium price will increase

2. Which statement is not correct?

A)If demand increases and supply decreases, price will rise and the quantity exchanged may either rise or fall

B)If supply increases and demand decreases, price will fall and the quantity exchanged may either rise or fall

C)If supply declines and demand remains constant, price will rise and the quantity exchanged will fall

D)If demand decreases and supply increases, price will fall and the quantity exchanged will fall