CityMesa Miramar Continuing Ed My Institution Open OnDeman C

City-Mesa Miramar Continuing Ed. My Institution Open OnDeman Chapter 3 InQuiaitive: Chaptor 3: The Market at Work Supply and Demand INQUIZITIVE Chapter 3: The Market at Work: Supply and Demand E Page 104 Appendix: Changes in Both Demand and Supply In a scenario where we expect a shift in both supply and demand, if the demand for a product increases, the price will always increase. True False 3

Solution

FALSE.

If demand increases, demand curve shifts rightward, increasing price. But if at the same time supply increases, so supply curve shifts rightward, price decreases. If the rightward shift in supply curve is higher in magnitude than the rightward shift in demand curve, price will decrease as the net effect.