Question

When the expected future price of a good falls, the supply curve shifts to the right...

When the expected future price of a good falls, the supply curve shifts to the right and the demand curve shifts to the left simultaneously. What happens to the equilibrium price after the shifts? What happens to the equilibrium quantity after the shifts? Is it always possible to determine the direction of change in both the equilibrium price and quantity or is more information necessary? Use supply and demand curves to graphically illustrate your answer

7.0.3

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Answer #1

Answer:

1):- When the shift in supply is equal to the shift in demand then : The Equilibirium quantity won't change but there will be a chnage in Price.The Equilibirium price lowers down.

2):- When the shift in supply is greater than the shift in demand.THe equilibirium quantity will increase and the equilibirium price will decrease.

3):- When the shift in supply is lower than the shift in demand. The equilibirium price and equilibirium quantity both will be reduced.

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