If the demand curve for bottled water shifts rightward and the supply curve of bottled water shifts rightward, the equilibrium

Question

Quizplus · Accepted Answer

When both demand and supply curves shift rightward, there will definitely be an increase in the equilibrium quantity of bottled water. However, the effect on the price of bottled water will depend on the magnitude of the shifts in the curves. If the demand shift is greater than the supply shift, the price will increase. If the supply shift is greater than the demand shift, the price will decrease. Therefore, it is not possible to determine the direction of the price change with certainty.

If the Demand Curve for Bottled Water Shifts Rightward and the Supply