How are the equilibrium price and quantity affected when (a) both demand and supply curves shift in the same direction? (b) demand and supply curves shift in opposite directions?
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Answer (a) When both demand and supply curves shift In same direction (shift to left) the equilibrium quantity will fall but equilibrium price may or may not be affected There may be three situations (i) Equilibrium price will go up. when decrease In demand is less than decrease in supply.
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(a) When both demand and supply curves shift In same direction (shift to left) the equilibrium quantity will fall but equilibrium price may or may not be affected There may be three situations (i) Equilibrium price will go up. when decrease In demand is less than decrease in supply.
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