Question

When demand shifts rightward and supply shifts leftward, which of the following outcomes is certain? A. Equilibrium quantity will increase
B. Equilibrium price will increase
C. Equilibrium quantity may increase, decrease, or remain unchanged
D. Equilibrium price may increase, decrease, or remain unchanged

• A. A and B only
• B. B and C only
• C. A and D only
• D. B only

Hint:

Demand right and supply left: Price definitely rises, quantity is uncertain.

Answer 1

The Correct Option is B

Concept:
Rightward shift of demand means demand increases. Leftward shift of supply means supply decreases. When demand increases and supply decreases, both changes push price upward. But their effects on quantity are opposite.
Step 1: Effect of rightward shift in demand.
When demand increases: Equilibrium price increases
and Equilibrium quantity increases

Step 2: Effect of leftward shift in supply.
When supply decreases: Equilibrium price increases
and Equilibrium quantity decreases

Step 3: Combine both effects on price.
Both changes increase price. Therefore, equilibrium price will certainly increase. So: \[ B = \text{Correct} \]
Step 4: Combine both effects on quantity.
Demand increase pushes quantity upward. Supply decrease pushes quantity downward. So, the final effect on quantity depends on the relative magnitude of the shifts. Therefore, equilibrium quantity may increase, decrease or remain unchanged. So: \[ C = \text{Correct} \]
Step 5: Final conclusion.
The certain outcomes are: \[ B,\ C \] Hence: \[ \boxed{\text{(B) B and C only}} \]