ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -An increase in demand and a decrease in supply will cause an increase in equilibrium price, but the effect on equilibrium quantity cannot be detennined. 1. For any quantity, consumers now place a higher value on the good, and producers must have a higher price in order to supply the good; therefore, price will increase.

Detailed explanation-2: -A change in the price of a good or service causes a movement along a specific demand curve, and it typically leads to some change in the quantity demanded, but it does not shift the demand curve.

Detailed explanation-3: -The demand for a good increases or decreases depending on several factors. This includes the product’s price, perceived quality, advertising spend, consumer income, consumer confidence, and changes in taste and fashion.

Detailed explanation-4: -A decrease in demand will cause the equilibrium price to fall; quantity supplied will decrease. 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.