What happens to equilibrium price and quantity in the following scenarios? Circle the correct answer for each
Question:
- What happens to equilibrium price and quantity in the following scenarios? Circle the correct answer for each scenario below.
- Supply shifts right
PRICE -> GOES UP GOES DOWN UNDETERMINED
QUANTITY -> GOES UP GOES DOWN UNDETERMINED
- Demand decreases
PRICE -> GOES UP GOES DOWN UNDETERMINED
QUANTITY -> GOES UP GOES DOWN UNDETERMINED
- Demand and supply both increase
PRICE -> GOES UP GOES DOWN UNDETERMINED
QUANTITY -> GOES UP GOES DOWN UNDETERMINED
- Demand shifts left and supply shifts right
PRICE -> GOES UP GOES DOWN UNDETERMINED
QUANTITY -> GOES UP GOES DOWN UNDETERMINED
- A very large shift to the right in demand is accompanied by a very small shift to the left in supply (assume curves have equal magnitude of slope)
PRICE -> GOES UP GOES DOWN UNDETERMINED
QUANTITY -> GOES UP GOES DOWN UNDETERMINED
Macroeconomics Principles And Policy
ISBN: 9780324586213
11th Edition
Authors: William J. Baumol, Alan S. Blinder