Use the following to answer question(s): Simultaneous Shifts in Demand and Supply

-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves.In this market for a normal good:

Question

Use the following to answer question(s): Simultaneous Shifts in Demand and Supply
 
-(Exhibit: Simultaneous Shifts in Demand and Supply) D₁ and S₁ are original supply and demand curves, and S₂ and D₂ are new curves.In this market for a normal good:

Quizplus · Accepted Answer

The shift from D₁ to D₂ indicates an increase in demand, while the shift from S₁ to S₂ indicates an increase in supply. The intersection point between D₂ and S₂ is at a lower price and a higher quantity than the intersection point between D₁ and S₁. Therefore, the increase in demand has led to an increase in quantity traded, which has led to a decrease in price.

Use the Following to Answer Question(s): Simultaneous Shifts in Demand