Changes in Equilibrium Price and Quantity

Question 1

When does market equilibrium change (4)

Answer 1

When there are changes in the following of any combination of these for possibilities:
1) Increase in demand (rightward shift of the demand curve)
2) Decrease in demand (leftward shift of the demand curve)
3) Increase in supply (rightward shift of the supply curve)
4) Decrease in supply (leftward shift of the supply curve)

Question 2

What does the third law of demand state?

Answer 2

1) An increase in demand, ceteris paribus will tend to increase both equilibrium price and equilibrium quantity trade.
2) A decrease in demand, ceteris paribus will tend to decrease the equilibrium price and equilibrium quantity trade.

Question 3

What does the fourth law of demand state?

Answer 3

An increase in supply, ceteris paribus, will tend to lower eq. price and increase eq. quantity traded
A decrease in supply, ceteris paribus, will tend to increase eq. price and lower the eq. quantity traded