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Exhibit: Simultaneous Shifts in Demand and Supply
-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves. In this market for a normal good:

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Exhibit: Simultaneous Shifts in Demand and Supply

-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves. In this market for a normal good:

Quizplus · Accepted Answer

The shift to S₂ shows that supply has increased. The shift to D₂ shows that demand has increased. The intersection of the new supply and demand curves results in a lower equilibrium price compared to the original equilibrium. Therefore, the correct answer is that demand has increased and price has fallen.

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