When both curves shift:

Question

Quizplus · Accepted Answer

When both curves shift, equilibrium price OR equilibrium quantity is indeterminate, but we can't predict which one. It depends on the magnitude of the shift and the relative elasticity of supply and demand. If the demand curve shifts more than the supply curve, then equilibrium price will increase while equilibrium quantity will decrease, and vice versa. If the shifts are equal in magnitude, then either price or quantity may change, but we can't say for certain which one.

When Both Curves Shift