Effect on equilibrium price and quantity? hi, i have 4 questions where demand an
ID: 1167878 • Letter: E
Question
Effect on equilibrium price and quantity?
hi, i have 4 questions where demand and supply are changing or staying the same, and I just wanted to make sure that I got the effect on equillibrium price and quantity right D (demand) S (supply) Q (quantity) P (price)
1. D increases, S remains same = Q increases, P increases
2. D decreases, S remains same = Q decrease, P decrease
3. D remains same, S increase = P decrease, Q increase
4. D remains same, S decreases = P increase, Q decrease
did I do them right, if not please explain so I can understand it better Thanks!
Explanation / Answer
You have got it all right. Kindly refer to the table below for future references.
EP (equilibrium price) &
EQ (equilibrium quantity)
Demand Increase
Demand Decrease
Demand Same
Supply Increase
EP Unknown
EQ Higher
EP Lower
EQ Unknown
EP Lower
EQ Higher
Supply Decrease
EP Higher
EQ Unknown
EP Unknown
EQ Lower
EP Higher
EQ Lower
Supply Same
EP Higher
EQ Higher
EP Lower
EQ Lower
EP Same
EQ Same
EP (equilibrium price) &
EQ (equilibrium quantity)
Demand Increase
Demand Decrease
Demand Same
Supply Increase
EP Unknown
EQ Higher
EP Lower
EQ Unknown
EP Lower
EQ Higher
Supply Decrease
EP Higher
EQ Unknown
EP Unknown
EQ Lower
EP Higher
EQ Lower
Supply Same
EP Higher
EQ Higher
EP Lower
EQ Lower
EP Same
EQ Same
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