Market EquilibriumWhich of the following is a correct example of supply and demand shifting in different (opposite) directions?Increase in costs of setting up a new college and increase in demand for higher educationIncrease in costs of setting up new college and decrease in demand for higher educationDecrease in costs of setting up new college and no change in demand for higher educationIncrease in cost of setting up new college and no change in demand for higher education
Question
Market EquilibriumWhich of the following is a correct example of supply and demand shifting in different (opposite) directions?Increase in costs of setting up a new college and increase in demand for higher educationIncrease in costs of setting up new college and decrease in demand for higher educationDecrease in costs of setting up new college and no change in demand for higher educationIncrease in cost of setting up new college and no change in demand for higher education
Solution
The correct example of supply and demand shifting in different (opposite) directions is: "Increase in costs of setting up a new college and decrease in demand for higher education".
Here's why:
-
"Increase in costs of setting up a new college" - This would lead to a decrease in supply. If the costs of setting up a new college increase, fewer colleges will be established, leading to a decrease in the supply of higher education.
-
"Decrease in demand for higher education" - This is a shift in the opposite direction. If the demand for higher education decreases, it means that fewer people are interested in pursuing higher education.
So, in this scenario, the supply decreases (due to increased costs) and the demand also decreases. These are opposite shifts in the market equilibrium.
Similar Questions
Effects of shifts in demand and supply on market equilibrium
When supply shifts to the right and demand stays constant, the equilibrium price ________ and the equilibrium quantity ________.Group of answer choicesincreases; decreasesdecreases; increasesincreases; increasesstays the same; increasesdecreases; decreases
What occurs when the market price is above the equilibrium price?ShortageSurplusNo changeDemand shifts to the left
A market experiencing a supply shift will see its equilibriumMultiple choice question.price change, but its quantity be unchanged.price and quantity both change.quantity change, but its price be unchanged.
An increase in the price of raw materials translates into higher production costs and hence a _____ shift in market _____.Multiple choice question.leftward; supplyrightward; supplyleftward; demand
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.