A rightward shift in a demand curve and a rightward shift in a supply curve both result in a
A)Lower equilibrium price.
B)Lower equilibrium quantity.
C)Higher equilibrium price.
D)Higher equilibrium quantity.

Question

Quizplus · Accepted Answer

A rightward shift in both demand and supply curves will lead to a higher equilibrium quantity. However, the effect on equilibrium price will be different. A rightward shift in demand will lead to a higher equilibrium price, while a rightward shift in supply will lead to a lower equilibrium price. Therefore, we cannot determine the effect on equilibrium price without knowing which curve shifted.

A Rightward Shift in a Demand Curve and a Rightward