Question

How equilibrium price and quantity affected when
a) both demand and supply curves shift in the same direction
b) demand and supply curves shift opposite to each other​

Answer 1

1. 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.

2. Effects of Shifts in Supply and Demand

Upward shifts in the supply and demand curves affect the equilibrium price and quantity. If the supply curve shifts upward, meaning supply decreases but demand holds steady, the equilibrium price increases but the quantity falls.