3.5: Predicting Changes in Price and Quantity

Question 1

When demand increases, what happens to price and quantity?

Answer 1

the price rises and the quantity increases.

Question 2

When demand decreases, what happens to price and quantity?

Answer 2

the price falls and the quantity decreases.

Question 3

When supply increases, what happens to price and quantity?

Answer 3

the price falls and the quantity increases.

Question 4

When supply decreases, what happens to price and quantity?

Answer 4

the price rises and the quantity decreases.

Question 5

If demand increases by more than supply increases, the price ___. (same direction movement)

Answer 5

rises.

Question 6

If supply increases by more than demand increases, the price ___. (same direction movement)

Answer 6

falls

Question 7

If demand changes by more than supply, the equilibrium quantity changes in the ____ as the change in demand. (opposite direction movement)

Answer 7

same direction

Question 8

If supply changes by more than demand, the equilibrium quantity changes in the ____ as the change in supply. (opposite direction movement)

Answer 8

same direction