Assume that consumer’s income and the number of sellers in the market for good X both falls. Based on this information we can conclude with certainty that the equilibrium :
Quantity will decrease
A fall in consumers’ income (for a normal good) reduces demand, shifting the demand curve to the left. A fall in the number of sellers reduces supply, shifting the supply curve to the left.
A leftward shift of demand lowers both price and quantity; a leftward shift of supply raises price but lowers quantity. The effect on price is therefore uncertain – it depends on which shift is larger.
Both shifts, however, push equilibrium quantity downward, so the fall in quantity can be concluded with certainty.
Hence, the answer is Quantity will decrease.
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