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Analyzing Changes in Equilibrium

How is price ...

Question

How is price affected by decrease in supply?

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Solution

In case where there is decrease in supply, keeping other factors influencing supply constant there will an increase in the price of the commodity to reduce the quantity demanded for the commodity.

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How is price affected by decrease in demand?

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How is the price of a commodity affected when its demand increases more than supply?

Q. Information & Concept-based Questions.
How is price affected by increase in supply?

Q. Answer the following question briefly:
With the help of the diagram, show how the equilibrium price and quantity of a commodity are affected when:
Demand is perfectly elastic and supply decreases.

How are the equilibrium price and quantity affected when demand and supply curves shift in the opposite direction?

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