Suppose the demand for good X shifts in. Which of the following statements is (are) TRUE?

Question

Quizplus · Accepted Answer

I. The price of good X will increase - This is not necessarily true as a shift in demand does not directly affect the price of the good. Other factors such as production costs may influence the price.

II. The quantity demanded of good X will increase - This is true because when demand shifts inwards, consumers are willing to purchase more of the good at any given price, resulting in an increase in quantity demanded.

III. The quantity supplied of good X will decrease - This is also true because as quantity demanded increases, firms will supply more of the good but may not be able to produce enough to meet the new level of demand, resulting in a decrease in quantity supplied.

Suppose the Demand for Good X Shifts In