A decrease in supply of X increases the equilibrium price of X,which reduces the demand for X and automatically returns the price of X to its initial level.

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rajshree nupur · Accepted Answer

Final Answer : False, Explanation :  A decrease in supply of X would increase the equilibrium price of X, but it would not necessarily reduce the demand for X. In fact, a higher price could lead to an increase in demand for substitute goods, resulting in a shift in demand towards those substitute goods. The price of X would eventually settle at a new equilibrium point, which may be higher or lower than the initial level.

A decrease in supply of X increases the equilibrium price of X,which reduces the demand for X and automatically returns the price of X to its initial level.

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