Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Market Equilibrium

Question:

If supply curve shifts to the left, what will be change in equilibrium?

Options:

Price and quantity does not change

Price and quantity change in same direction

Price and quantity change in different direction

Only quantity changes

Correct Answer:

Price and quantity change in different direction

Explanation:

The correct answer is option 3: Price and quantity change in different direction

  • When the supply curve shifts to the left, it means supply decreases, which creates a shortage at the original equilibrium price.
  • To restore equilibrium:
    • Equilibrium price increases because fewer goods are available.
    • Equilibrium quantity decreases because the market now has less supply.
  • Since price increases and quantity decreases (opposite directions), they change in different directions.