Question

How will the equilibrium price and quantity change if there is an increase in demand and a

decrease in supply? Draw the original curves and the new curves after the shift.

Answer 1

Step-by-step explanation:

The same inverse relationship holds for the demand for goods and services. However, when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price and vice versa. Supply and demand rise and fall until an equilibrium price is reached.