When demand changes and the demand curve shifts, equilibrium price and equilibrium quantity change in the same direction.

Question

Quizplus · Accepted Answer

This is known as the law of demand and supply. When demand shifts, the equilibrium price and quantity move in the same direction to reach a new equilibrium point that balances the changes in the market. For instance, if demand increases, price and quantity will rise, and if demand decreases, price and quantity will fall.

When Demand Changes and the Demand Curve Shifts, Equilibrium Price