Exhibit 4-6 Demand and supply curves

If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n):

Question

Exhibit 4-6 Demand and supply curves

If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n):

Quizplus · Accepted Answer

A shift in demand and supply curves as shown in Exhibit 4-6 will result in a new equilibrium point where the market price will decrease and the quantity exchanged will increase. This is because the shift in demand curve towards the left indicates a decrease in demand which will lower the market price. At the same time, the shift in the supply curve towards the right indicates an increase in supply which will increase the quantity exchanged. The new equilibrium point will be where these two forces intersect and result in a lower market price and a higher quantity exchanged.

Exhibit 4-6 Demand and Supply Curves