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Market for a good is in equilibrium. There is simultaneous ''decrease'' both in demand and supply but there is no change in market price. Explain with help of a schedule how it is possible.

Answer» <html><body><p></p>Solution :A simultaneous decrease in both demand and supply may not influence the market <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a>. This can be illustrated with the help of following <a href="https://interviewquestions.tuteehub.com/tag/schedule-637564" style="font-weight:bold;" target="_blank" title="Click to know more about SCHEDULE">SCHEDULE</a>: <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_MIC_ECO_C11_S01_010_S01.png" width="80%"/> <br/> As seen in the <a href="https://interviewquestions.tuteehub.com/tag/given-473447" style="font-weight:bold;" target="_blank" title="Click to know more about GIVEN">GIVEN</a> table, <a href="https://interviewquestions.tuteehub.com/tag/initially-516121" style="font-weight:bold;" target="_blank" title="Click to know more about INITIALLY">INITIALLY</a>, the equilibrium (market) price is <a href="https://interviewquestions.tuteehub.com/tag/rupee-1192322" style="font-weight:bold;" target="_blank" title="Click to know more about RUPEE">RUPEE</a> 6 per unit and the equilibrium demand and supply is rupee 60 units. <br/> When both demand and supply decrease by 10%, then both demand and supply fall from 60 units to 54 units. It means, at market price of rupee 6, both demand and supply are equal. So, a simultaneous decrease in both demand and supply may not change the market price.</body></html>


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