Answer to Question #290691 in Economics for Mou

Question

Question: Identify what happens to equilibrium price and quantity in each of the following cases:

a. Demand rises and supply is constant

b. Demand falls and supply is constant

c. Supply rises and demand is constant

d. Supply falls and demand is constant

e. Demand rises by the same amount that supply falls

f. Demand falls by the same amount that supply rises

g. Demand falls by less than supply rises

h. Demand rises by more than supply rises

i. Demand rises by less than supply rises

j. Demand falls by more than supply falls

Answer 1

Equilibrium price (Pe) and quantity (Qe) in each of the following cases will:

a. Demand rises and supply is constant:

Pe increases, Qe increases.

b. Demand falls and supply is constant:

Pe decreases, Qe decreases.

c. Supply rises and demand is constant:

Pe decreases, Qe increases.

d. Supply falls and demand is constant

Pe increases, Qe decreases.

e. Demand rises by the same amount that supply falls:

Pe increases, Qe remains the same.

f. Demand falls by the same amount that supply rises:

Pe decreases, Qe remains the same.

g. Demand falls by less than supply rises:

Pe decreases, Qe increases.

h. Demand rises by more than supply rises:

Pe increases, Qe increases.

i. Demand rises by less than supply rises:

Pe decreases, Qe increases.

j. Demand falls by more than supply falls:

Pe decreases, Qe decreases.