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Unformatted text preview: 1 1 2 2 1 2 2 1 Large increase in demand Small decrease in supply Small increase in demand Large decrease in supply Figure 4-12 A S HIFT IN B OTH S UPPLY AND D EMAND . Here we observe a simultaneous increase in demand and decrease in supply. Two outcomes are possible. In panel (a), the equilibrium price rises from P 1 to P 2 , and the equilibrium quantity rises from Q 1 to Q 2 . In panel (b), the equilibrium price again rises from P 1 to P 2 , but the equilibrium quantity falls from Q 1 to Q 2 ....
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.
- Spring '10