Increase/decrease in demand Increase/Decrease in supply

Question 1

When there is an increase in demand and a decrease in supply, what would it lead to

Answer 1

An increase in demand would lead to an outward shift of the demand curve from D to D1 and a decrease in supply would lead to an inward shift of teh supply curve from S to S1

Question 2

What happens when there is an increase in demand a decrease in supply

Answer 2

An increase in equilibrium quantity from Qe to Q1 and an increase in eq. price from Pe to P1.

Question 3

What happens at E1 when there is an increase in demand an a decrease in supply

Answer 3

A new eq. point is established at E1

Question 4

What happens when there is a decrease in demand an an increase in supply

Answer 4

A decrease in demand would lead to an inward shift of the demand curve from D to D1 while an increase in supply would lead to an outward shift of the supply curve from S to S1

Question 5

What happens to eq. quantity and price when there is a decrease in demand and an increase in supply

Answer 5

This causes a decrease in eq. quantity from qe to q1 and a decrease in eq. price from Pe to P1. A new eq. point is established at E1