Explain the effect on equilibrium price and equilibrium quantity in the following cases: (a) Demand curve shifts to the left, (b) Supply increases when the demand is perfectly elastic, (c) Both demand and supply increase in same ratio.

Explain the effect on equilibrium price and equilibrium quantity in th

1.	Explain the effect on equilibrium price and equilibrium quantity in the following cases: (a) Demand curve shifts to the left, (b) Supply increases when the demand is perfectly elastic, (c) Both demand and supply increase in same ratio.
Answer» Solution :(a) Both equilibrium price and qunatity DEMANDED falls. (B) Equilibrium price remains the same whereas equilibrium QUANTITY INCREASES. (c) Equilibrium quantity increases whereas the equilibrium price remains the same.