Refer to the figure below:
Let supply remain constant at S; a decrease in income causes consumers to be willing and able to purchase 150 fewer units at each price than they were previously.
A. The new equilibrium price and quantity will be P = $7 and Q = 250.
B. The new equilibrium price and quantity will be P = $6 and Q = 150.
C. The new equilibrium price and quantity will be P = $5 and Q = 200.
D. The new equilibrium price and quantity will be P = $5 and Q = 150.
Answer: C
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