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In each of the follow scenarios determine with the correct combination of price change and quantity...

  1. In each of the follow scenarios determine with the correct combination of price change and quantity change. Is the equilibrium price and quantity increasing, remaining, decreasing, or indeterminate. Each question should have an answer for price and one for quantity. Explain your answer!!

        a.    There is an increase in demand and an increase in supply.

        b.    Decrease in demand and decrease in supply

        c.     Increase in demand and a decrease in supply

        d.    Demand falls and supply increases

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Answer #1

Answer.

a. This will increase the quantity, however the change in price is indeterminant as this would depend upon the ratio of change in demand and supply.

b. This will decrease the quantity, however the change in price is indeterminant as this would depend upon the ratio of change in demand and supply.

c.  This will increase the price, however the change in quantity is indeterminant as this would depend upon the ratio of change in demand and supply.

d.  This will decrease the price, however the change in quantity is indeterminant as this would depend upon the ratio of change in demand and supply.

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