The correct answer is Option (1) → (A)-(I), (B)-(II), (C)-(III), (D)-(IV)
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A) Demand shifts right and supply remains unchanged: When demand increases (shifts right) and supply remains constant, buyers are willing to purchase more at every price, leading to an increase in both the equilibrium price and the equilibrium quantity. Matches with (I) Price increase, quantity increases.
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B) Supply shifts right and demand remains unchanged: When supply increases (shifts right) and demand remains constant, producers are willing to offer more at every price, leading to a decrease in the equilibrium price and an increase in the equilibrium quantity. Matches with (II) Price decrease, quantity increases.
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C) Demand shifts left and supply shifts left: When both demand and supply decrease (shift left), both shifts individually lead to a decrease in the equilibrium quantity. Therefore, the equilibrium quantity will unambiguously decrease. The effect on price is indeterminate, as a leftward demand shift decreases price, while a leftward supply shift increases price. Matches with (III) Quantity decreases.
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D) Supply shifts right and demand shifts right: When both supply and demand increase (shift right), both shifts individually lead to an increase in the equilibrium quantity. Therefore, the equilibrium quantity will unambiguously increase. The effect on price is indeterminate, as a rightward supply shift decreases price, while a rightward demand shift increases price. Matches with (IV) Quantity increases.
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