Answer to Question #94858 in Microeconomics for Elle Marie

Question

Why does an increase in demand for school bags during the start of an academic year raise the quantity of school bags demanded but not the quantity supplied?

Answer 1

Rise of demand for school bags at the start of school year shifts the demand curve to the right and new equilibrium price is higher than befor that. It is more profitable for suppliers to sell the same quantity but for a higher price and get higher profit.