Page 6 - Home Assignment-Price determination

In the above diagram it is noticed that as the increase in demand is
equal to decrease in supply the equilibrium quantity remains
constant at OQ but the equilibrium price increases to .
1

Case-2

If the decrease in demand is equal to increase in supply, then the
equilibrium price will decrease but the equilibrium quantity will
remain constant.

Y

pri S
ce E
|
P

|

1
D

|
X

Q Quantity demanded
O
and quantity supplied
In the above diagram it is noticed that as the decrease in demand is

equal to increase in supply the equilibrium quantity remains
constant at OQ but the equilibrium price decreases to .
1
 There are simultaneous changes in both demand and supply. In what
cases the equilibrium quantity will remain constant?

Case-1

If decrease in demand is equal to decrease in supply then the
equilbrium price will remain constant but the equilibrium quantity
will fall.