Question

For each of the following, assume that the supply curve shifts while the demand curve remains constant. What is the direction of the supply shift and the relative elasticity of demand?

Answer 1

Shifts in demand or supply curves occur due to changes in factors affecting demand or supply. Movements along the curve occur due to changes in price.

Step-by-step explanation:

Difference between shifts of demand or supply versus movements along a demand or supply curve:

Shifts in the demand or supply curve occur when there is a change in factors affecting demand or supply, such as income or production costs. This leads to a new equilibrium price and quantity.

Movement along the demand or supply curve, on the other hand, occurs when there is a change in price, resulting in a change in quantity demanded or supplied while other factors remain constant.