Question

20. How does the price, quantity and total revenue at the equi librium change when: a) the demand increases and the supply is fixed, b) the supply decreases and the demand is perfectly elastic?

Answer 1

a)

$$p\downarrow$$

$$Q\uparrow$$

$$TR\uparrow$$

b)

$$p =const$$

$$Q\downarrow$$

$$TR\downarrow$$