Assignment 3 How will each of the following changes in demand and/or supply affe

Question

Assignment 3 How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? (It's best to draw the curves yourself as a visual aid, but you do not have to include the graphs in your submission) a. Supply decreases and demand is constant. b. Demand decreases and supply is constant. c. Supply increases and demand is constant. d. Demand increases and supply increases. e. Demand increases and supply is constant. f. Supply increases and demand decreases. g. Demand increases and supply decreases. h. Demand decreases and supply decreases

Explanation / Answer

In case of the situations given above, following would happen: -

a. Supply decreases and demand is constant.

Ans: - Price will go up and quantity will go down

b. Demand decreases and supply is constant.

Ans: - Price and quantity will go down

c. Supply increases and demand is constant.

Ans: - Price will go down and quantity will go up

d. Demand increases and supply increases.

Ans: - Price will remain intermediate and quantity will go up

e. Demand increases and supply is constant.

Ans: - Price and quantity both will go up

f. Supply increases and demand decreases.

Ans: - Price will go down and quantity will remain intermediate

g. Demand increases and supply decreases.

Ans: - Price will go up and quantity will remain intermediate

h. Demand decreases and supply decreases.

Ans: - Price will remain intermediate and quantity will go down

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---