Answer to Question #287526 in Microeconomics for uday

Question

When demand and supply change in the same direction we can unambiguously

say how the equilibrium price and quantity change. Explain using diagrams

whether the statement is true or false.

Answer 1

When demand and supply change in the same direction we can unambiguously say that the price and quantity move in the same direction.

For example if both demand and supply reduces equilibrium quantity ambiguously reduces as below;