Evaluate each of the supply and demand scenarios below, answering the following questions:
How will each affect equilibrium price and equilibrium quantity in a competitive market?
Will price and quantity rise, fall, or be unchanged?
Based on the magnitudes of the shifts, will the answers be indeterminate?
Provide an appropriate graph to illustrate each answer (this does not require use of Excel, although you may use it).
Demand decreases and supply is constant.
Demand increases and supply increases.
Supply decreases and demand is constant.
Supply increases and demand decreases.
Demand increases and supply decreases.
Demand decreases and supply decreases.
Demand increases and supply is constant.
Note that constant means with no shift while increases or decreases means a shift occurs.