Answer to Question #139383 in Microeconomics for James

Question

Sometimes both demand and supply shift at the same time. Create a graphic organizer that shows all possible double shifts. Be sure to identify what happens to price and quantity in each scenario.

Answer 1

In the graph above, the initial supply and demand are shown in red, and the received ones - in blue, while the price does not change, but the quantity increases.

On the chart, initial supply and demand are shown with bold lines, subsequent ones with thin lines. The price increases, the quantity decreases.