CHANGES IN EQUILIBRIUM PRICE AND OUTPUT SIMULTANEOUS CHANGES IN EQUILIBRIUM OF DEMAND AND SUPPLY

AND SIMULTANEOUS CHANGES IN DEMAND AND SUPPLY (EQUAL PROPORTION)

CHANGES IN THE EQUILIBRIUM PRICE AND OUTPUT
It means the increase or decrease in Demand or Supply.
It occurs due to a change in factors other than the price of a commodity
1. SHIFT IN SUPPLY ONLY (DEMAND REMAINS CONSTANT)
Market Equilibrium with Shift of the Supply curve to the Right ex. Due to
technological improvements
Market Equilibrium with Shift of the Supply curve to the Left ex. Due to
the effects of typhoon
A situation when both demand and supply increase or decrease at the
same time
A. Market Equilibrium with Shift of the Demand Curve to the right and
Shift of the Supply Curve to the Right (Equal Proportion)
When increase in Demand is equal to increase in Supply:
Equilibrium price remains the same; equilibrium quantity increases

2. SHIFT IN DEMAND ONLY (SUPPLY REMAINS CONSTANT)

Market Equilibrium with Shift of the Demand curve to the Right ex. Due
to Increase In Income
Market Equilibrium with Shift of the Demand curve to the Left ex. Due to
Change of Preference/Taste
1. SHIFT IN SUPPLY ONLY

Market Equilibrium with Shift of the Supply curve to the Right

Supply for a commodity increases while Demand remains Constant.
Decrease in Equilibrium Price but increase In Quantity
B. Market Equilibrium with Shift of the Demand Curve to the Right and
Shift of the Supply Curve to the Left (Equal Proportion)
When increase in Demand is equal to decrease in Supply:
Equilibrium price increases; equilibrium quantity remains the same

1. SHIFT IN SUPPLY ONLY

B. Market equilibrium with shift of the supply curve to the left

Supply for a commodity decreases while Demand remains Constant.
-Increase in Equilibrium Price but decrease in Quantity.

C. Market Equilibrium with Shift of the Demand Curve to the Left and
Shift of the Supply Curve to the Right (Equal Proportion)
When decrease in demand is equal to increase in supply:
Equilibrium price decreases; equilibrium quantity remains the same

2. SHIFT IN DEMAND ONLY

A. Market equilibrium with shift of the demand curve to the right
Demand for a commodity increases while supply is Constant.
-Equilibrium Price and Quantity Increases

D. Market Equilibrium with Shift of the Demand Curve to the Left and
Shift of the Supply Curve to the Left (Equal Proportion)
When decrease in demand is equal to decrease in supply:
Equilibrium price remains the same; equilibrium quantity decreases.
2. SHIFT IN DEMAND ONLY
B. Market Equilibrium with Shift of the Demand curve to the Left
Demand for a commodity decreases while
Supply is constant.
-Equilibrium Price and Quantity Decreases

A. Decrease in Demand > Decrease in Supply

When decrease in demand is proportionately more than decrease in
supply, then leftward shift in demand curve and supply curve:
equilibrium price falls/decreases and equilibrium quantity falls/
decreases
B. Decrease in Demand < Decrease in Supply
When decrease in demand is proportionately less than decrease in
supply, then leftward shift in demand curve and supply curve:
Equilibrium price rises/increases whereas, equilibrium quantity
falls/decreases
F. Decrease in Demand < Increase in Supply
When decrease in demand is proportionately less than increase in
supply, then leftward shift in demand curve is proportionately less than
rightward shift in supply curve
Equilibrium price falls/decreases; equilibrium quantity rises/increases

G. Increase in Demand > Decrease in Supply

When increase in demand is proportionately more than decrease in
C. Increase in Demand > Increase in Supply
supply, then rightward shift in demand curve is proportionately more
When increase in demand is proportionately more than increase in
than leftward shift in supply curve:
supply then rightward shift in demand curve:
equilibrium price rises/increases; equilibrium quantity rises/ increases
Equilibrium price rises/increases and equilibrium quantity
rises/increases

H. Increase in Demand < Decrease in Supply

D. Increase in Demand < Increase in Supply
When increase in demand is proportionately less than increase in supply
then rightward shift in demand curve and supply curve
Equilibrium price falls/ decreases whereas, equilibrium quantity
rises/increases
When increase in demand is proportionately less than decrease in
supply then rightward shift in demand curve is proportionately less than
leftward shift in supply curve
equilibrium price rises/increases; equilibrium quantity falls/decreases

E. Decrease in Demand > Increase in Supply

When decrease in demand is proportionately more than increase in

supply then leftward shift in demand curve is proportionately more than
rightward shift in supply curve:
equilibrium price falls; equilibrium quantity falls