If the market demand curve shifts sharply to the left as the market supply curve moves to the right, we would expect:
A)the same price to prevail, with no change in quantity.
B)the same quantity to prevail.
C)price and quantity to fall.
D)price to fall while quantity may or may not change.
E)quantity to fall while price may or may not change.

Question

Quizplus · Accepted Answer

If the market demand curve shifts sharply to the left as the market supply curve moves to the right, we would expect the price to fall because of the excess supply. However, the change in quantity is indeterminate as it depends on the magnitude of the shifts in the demand and supply curves. Therefore, the best choice is D, price falls while quantity may or may not change.

If the Market Demand Curve Shifts Sharply to the Left