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11 March, 06:09

True or False:

When both the demand and supply curves shift, the curve that shifts by the smaller magnitude determines the effect on the undetermined equilibrium object.

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Answers (1)
  1. 11 March, 06:26
    0
    FALSE

    Explanation:

    The one which shift the most determinates the effect on the new equilibrium object.

    If the supply shift to the left by a greater magnitude then the effect will be for a decrease in supply:

    increase in price and decrease in quantity

    If the demand shift to the left by the greater magitude then the effect will be for a decrease in demand:

    decrease in both, price and quantity.

    if the supply shift to right is the greater maginitude the effect will be for an increase in supply:

    increase in quantity decreasein price

    if the demand shift to right in the higher maginitude the effect will be for an increase in demand

    increase in both, quantity and price.
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