If the demand and supply curves for a commodity both shift to the left by the same amount,then in comparison to the initial equilibrium,the new equilibrium will be characterized by ________.

Question

Quizplus · Accepted Answer

If both the demand and supply curves shift to the left by the same amount, then there will be a decrease in both quantity demanded and quantity supplied. However, the effect on price cannot be determined without knowing the relative magnitudes of the shifts. Thus, we can only determine that the equilibrium quantity will decrease, but we cannot determine the effect on price. Therefore, the correct choice is C, which states that the new equilibrium will have the same price but a lower quantity.

If the Demand and Supply Curves for a Commodity Both