Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:

If supply curve shifts leftward and demand curve shifts rightward then how it will affect the pricing?

Options:

Increase the price.

Decrease the price.

Price remain constant.

Price may increase or decrease.

Correct Answer:

Increase the price.

Explanation:

The correct answer is Option (1) → Increase the price.

When the supply curve shifts leftward, it means supply decreases. When the demand curve shifts rightward, it means demand increases. So, less supply and more demand happen simultaneously. This creates excess demand in the market, putting upward pressure on the price.