If there is a significant change in demand, the demand curve will shift but the supply curve will not

Economics Dec 08, 2020

If there is a significant change in demand, the demand curve will shift but the supply curve will not. What happens to the supply curve and why?

Expert Solution

The answer is that nothing will happen to the supply curve's actual equation. A change in the demand curve does not impact the position of the supply curve. However, there will be a change in the equilibrium supply quantity (i.e., a move along the supply curve). This is because any shift of the demand curve will change where the two equations intersect in order to form market equilibrium.

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