Multiple Choice QuestionA market experiencing a demand shift will see its equilibriumMultiple choice question.price change, but its quantity be unchanged.quantity change, but its price be unchanged.price and quantity both change.
Question
Multiple Choice QuestionA market experiencing a demand shift will see its equilibriumMultiple choice question.price change, but its quantity be unchanged.quantity change, but its price be unchanged.price and quantity both change.
Solution
The correct answer is: price and quantity both change.
Here's why:
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A demand shift in a market refers to a change in the quantity of a product that consumers are willing and able to purchase at different prices. This can be caused by a variety of factors, such as changes in consumer income, tastes, or the price of related goods.
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When demand shifts, it changes the demand curve on a price-quantity graph. This in turn changes the point at which the demand curve intersects with the supply curve, which is known as the market equilibrium.
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The market equilibrium represents the price and quantity at which the quantity demanded equals the quantity supplied. Therefore, when the demand curve shifts, it changes the equilibrium price and quantity.
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So, in a market experiencing a demand shift, both the price and quantity will change.
Similar Questions
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If the price of a product were to go down, what would happen to the quantity demanded of that product?Multiple ChoiceQuantity would increase.Quantity would decrease.Demand would increase.Demand would decrease.Demand and quantity would stay the same.
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