ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An increase in supply, all other things unchanged, will cause the equilibrium price to fall; quantity demanded will increase. A decrease in supply will cause the equilibrium price to rise; quantity demanded will decrease.

Detailed explanation-2: -There is an inverse relationship between the supply and prices of goods and services when demand is unchanged. If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher equilibrium quantity of goods and services.

Detailed explanation-3: -Answer and Explanation: False. If the market demand increases, the demand curve shifts to the right and meets the supply curve at a higher point. This higher point means a higher price.

Detailed explanation-4: -Decrease in demand lowers the price Decrease in supply raises the price. Figure 4.14(a) shows the effects of an increase in demand and a decrease in supply. An increase in demand shifts the demand curve rightward, and a decrease in supply shifts the supply curve leftward.