Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left,and the shift in demand is greater than the shift in supply.Then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

Question

Quizplus · Accepted Answer

When the supply curve shifts to the right, it indicates an increase in supply, which would typically lead to a lower price. When the demand curve shifts to the left, it indicates a decrease in demand, which also leads to a lower price and lower quantity demanded. Since the shift in demand is greater than the shift in supply, the dominant effect will be a decrease in both price and quantity.

Assume That the Supply Curve for a Commodity Shifts to the Right