Exhibit 4-6 Demand and supply curves If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n):

Question

Exhibit 4-6  Demand and supply curves  If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n):

Quizplus · Accepted Answer

The shift in demand and supply curves both lead to a decrease in equilibrium price, but the effect on quantity exchanged is ambiguous. However, in this case, the shift in the supply curve is larger than the shift in the demand curve, leading to a decrease in quantity exchanged. Therefore, the new equilibrium will show a decrease in market price and an increase in the quantity exchanged.

Exhibit 4-6 Demand and Supply Curves If the Market Demand