Question

Match the shifts in demand or supply to their effects on the equilibrium price (P) and quantity (Q).

• A. P up, Q up
• B. P down, Q down
• C. P down, Q up
• D. P up, Q down

Answer 1

(i) When the demand increases, there would be an upward movement along the supply curve.

(ii) When the demand decreases, there would be a downward movement along the supply curve.

(iii) When the supply increases, there would be a downward movement along the demand curve.

(iv) When the supply decreases, there would be a downward movement along the supply curve.