Question

True or False:

When both the demand and supply curves shift, the curve that shifts by the smaller magnitude determines the effect on the undetermined equilibrium object.

Answer 1

FALSE

Step-by-step explanation:

The one which shift the most determinates the effect on the new equilibrium object.

If the supply shift to the left by a greater magnitude then the effect will be for a decrease in supply:

increase in price and decrease in quantity

If the demand shift to the left by the greater magitude then the effect will be for a decrease in demand:

decrease in both, price and quantity.

if the supply shift to right is the greater maginitude the effect will be for an increase in supply:

increase in quantity decreasein price

if the demand shift to right in the higher maginitude the effect will be for an increase in demand

increase in both, quantity and price.