A decrease in supply will lead to an increase in the price, which decreases demand, thereby lowering

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“A decrease in supply will lead to an increase in the price, which decreases demand, thereby lowering price. Thus, a decrease in supply has no effect on the price of a good.” Evaluate this statement.

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Microeconomics Theory and Applications

ISBN: 978-1118758878

12th edition

Authors: Edgar K. Browning, Mark A. Zupan

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Question Posted: Nov 14, 2014 08:21 AM

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A decrease in supply will lead to an increase in the price, which decreases demand, thereby lowering

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This statement is false There is confusion of changes in demand or su...View the full answer

Microeconomics Theory and Applications

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