Evaluate each of the eight supply and demand scenarios

Question

Evaluate each of the eight supply and demand scenarios below by answering the following questions:

• How will each affect equilibrium price and equilibrium quantity in a competitive market?
• Will price and quantity rise, fall, or be unchanged?
• Based on the magnitudes of the shifts, will the answers be indeterminate?

Provide appropriate supply and demand graphs to illustrate your answers and use supply and demand to verify your answers.

1. Supply decreases and demand is constant.
2. Demand decreases and supply is constant.
3. Supply increases and demand is constant.
4. Demand increases and supply increases.
5. Demand increases and supply is constant.
6. Supply increases and demand decreases.
7. Demand increases and supply decreases.
8. Demand decreases and supply decreases.