While demand shifts have an effect on equilibrium price and quantity, supply shifts have no such effect.

Question

Quizplus · Accepted Answer

Supply shifts do have an effect on equilibrium price and quantity. When there is an increase in supply, the equilibrium price will decrease and the equilibrium quantity will increase. Conversely, when there is a decrease in supply, the equilibrium price will increase and the equilibrium quantity will decrease.

While Demand Shifts Have an Effect on Equilibrium Price and Quantity