Exploring Supply and Demand Dynamics

What is the first step in analyzing market equilibrium?

• Pinpointing the equilibrium

• Drawing the demand curve

• Drawing the supply curve

• Labeling the axes

What happens to price and quantity when demand increases?

• Both price and quantity go down

• Price goes down, quantity goes up

• Price goes up, quantity goes down

• Both price and quantity go up

When demand decreases, what happens to the equilibrium price and quantity?

• Both price and quantity increase

• Both price and quantity decrease

• Price increases, quantity decreases

• Price decreases, quantity increases

How does an increase in supply affect price and quantity?

• Both price and quantity go down

• Both price and quantity go up

• Price goes down, quantity goes up

• Price goes up, quantity goes down

What is the effect on price and quantity when supply decreases?

• Price goes down, quantity goes up

• Both price and quantity go down

• Price goes up, quantity goes down

• Both price and quantity go up

When both supply and demand increase, what is the net effect on quantity?

• Quantity fluctuates

• Quantity decreases

• Quantity remains the same

• Quantity increases

In a scenario where demand increases more than supply, what happens to the price?

• Price fluctuates

• Price remains the same

• Price decreases

• Price increases

What is the net effect on price when both demand increases and supply decreases?

• Price decreases

• Price remains the same

• Price fluctuates

• Price increases

What happens to quantity when demand increases but supply decreases?

• Quantity increases

• Quantity decreases

• Quantity remains the same

• Quantity fluctuates

What is the best way to understand the effects of different supply and demand changes?

• Guessing the outcomes

• Ignoring the changes

• Running through different scenarios

• Memorizing the outcomes