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

Question

Quizplus · Accepted Answer

Changes in endogenous variables, such as quantity demanded and supplied, are reflected in movements along the demand and supply curves, while changes in exogenous variables like input costs or regulations can shift the curves themselves. This statement accurately describes the graphical representation of demand and supply, as well as the effect of changes in endogenous variables on the curves.

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