Changes in Supply and Demand and Equilibrium Flashcards
How will CONSTANT SUPPLY and INCREASING DEMAND affect the EQUILIBRIUM PRICE and QUANTITY?
BOTH the equilibrium price and quantity will INCREASE.
How will CONSTANT SUPPLY and DECREASING DEMAND affect the EQUILIBRIUM price and quantity?
BOTH the equilibrium price and quantity will DECREASE.
How will CONSTANT DEMAND and DECREASING SUPPLY affect the equilibrium PRICE and QUANTITY?
The equilibrium PRICE will INCREASE;
the equilibrium QUANTITY will DECREASE.
How will CONSTANT DEMAND and INCREASING SUPPLY affect the equilibrium PRICE and QUANTITY?
The equilibrium PRICE will DECREASE;
the equilibrium QUANTITY will INCREASE.
How will the INCREASE of BOTH supply and demand affect equilibrium PRICE and QUANTITY?
The equilibrium PRICE will DEPEND on the relative shift of demand and supply;
the equilibrium QUANTITY will be in the DIRECTION of the shift.
How will the INCREASE of SUPPLY and the DECREASE of DEMAND affect equilibrium PRICE and QUANTITY?
The equilibrium PRICE will DECREASE;
the equilibrium QUANTITY will DEPEND.
How will the DECREASE of SUPPLY and the INCREASE of DEMAND affect equilibrium PRICE and QUANTITY?
The equilibrium PRICE will INCREASE;
the equilibrium QUANTITY will DEPEND.
TRICK: constant suPPly = “PP” = double = affects BOTH
BOTH = Increase/Decrease of Supply
TRICK: constant demand = law of DEMAND = inverse relationship = affects inversely
Which changes?: Constant demand = “C” sound = similar to “Q” sound = “K” sound = QUANTITY affected
SUPPLY change = QUANTITY change
TRICK: Complex cases (not including BOTH) = NO QUANTITY changes, YES SUPPLY change (+– or -++)
+SUPPLY -DEMAND; -PRICE
-SUPPLY +Demand; +PRICE
TRICK: Complex cases (BOTH) = NO PRICE changes; YES DEMAND changes
DEMAND changes = direction of SHIFT
