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10. Which \"dual shift\" scenario results in a rise in equilibrium price with th

ID: 1140642 • Letter: 1

Question

10. Which "dual shift" scenario results in a rise in equilibrium price with the effect on equilibrium quantity ambiguous (may increase, decrease or stay the same)? 11. Which "dual shift" scenario results in a fall in equilibrium price with the effect on equilibrium quantity ambiguous (may increase, decrease or stay the same)? 12. Which "dual shift" scenario results in a rise in equilibrium quantity with equilibrium price ambiguous (may increase, decrease or stay the same)? 13. Which "dual shift" scenario results in a fall in equilibrium quantity with equilibrium price ambiguous (may increase, decrease or stay the same)?

Explanation / Answer

10.

When there is rightward shift in the demand curve and leftward shift in the supply curve i.e., increase in demand and decrease in supply then the equilibrium price rises and the effect on equilibrium quantity will be ambiguous.

11. When there is decrease in demand and increase in supply i.e, shift the demand curve leftward and supply curve rightward then the equilibrium price falls and effect on equilibrium quantity remaining ambiguous.

12.

When there is rightward shift in both demand and supply curve, the equilibrium quantity rises but the effect on equilibrium price remains ambiguous.

13. When demand and supply both curve shifts leftward, the equilibrium quantity falls and the effect on equilibrium price remains ambiguous.

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