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

Question

Quizplus · Accepted Answer

When both the demand curve and the supply curve for a product shift leftward, it indicates a decrease in demand and a decrease in supply. The decrease in demand would typically lead to a lower equilibrium price and quantity, while the decrease in supply would typically lead to a higher equilibrium price and lower quantity. The combined effect on quantity is unambiguously a decrease (since both shifts suggest a lower quantity), but the effect on price is ambiguous without more information (since one shift suggests a higher price and the other suggests a lower price). Therefore, the only definite outcome is a decrease in the equilibrium quantity of bottled water.

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