Question

Describe the effect a positive shift in demand would have on the values of Price and Quantity in a supply and demand curve.

Answer 1

Answer: Equilibrium price and quantity will increase.

Explanation:

If there is a positive shift in demand i.e. rightward shift in the demand curve but the supply curve remains constant.

Then As shown in the figure, At the beginning 'E' is the equilibrium point with Equilibrium price "P" and Equilibrium quantity "Q".

But when there is positive shift in demand curve say D' then,

Equilibrium price will increase and equilibrium quantity will also increase.

say it becomes P' and Q'.

So, Positive shift in demand curve increases the price and Quantity in a supply and demand curve.