Suppose that we illustrate demand and supply with quantity on the horizontal axis and price on the vertical axis. Changes in exogenous variables are represented by shifts in the demand and/or supply curves.

Question

Quizplus · Accepted Answer

This statement is true. Demand and supply curves represent the relationship between quantity and price, and changes in exogenous variables (such as income or input costs) can shift these curves either to the left or right. This statement accurately describes how demand and supply curves are typically illustrated and how shifts in these curves represent changes in exogenous variables.

Suppose That We Illustrate Demand and Supply with Quantity on the Horizontal