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Effect of increase in demand and supply on equilibrium

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Show the impact on the equilibrium price and quantity that results from; (1) an increase in demand and (2) an increase in supply.

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Solution Summary

Solution describes impact of increase in demand and supply on equilibrium price and quantity with the help of suitable graphs.

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Please see the attached file for complete solution as graphs may not print here.


In the above graph DD and SS are initial demand and supply curves. The initial equilibrium point at M. Now let us assume that demand curve shifts to ...

Solution provided by:
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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