Which of the following statement/statements are true?
Statement 1: When increase in demand is more than decrease in supply, rightward shift in demand will be more than leftward shift in supply.
Statement 2: When increase in demand is more than decrease in supply, quantity rises.

Both the statements are true.

The correct answer is Option 1: Both the statements are true.

Statement 1: True

• When demand increases (rightward shift) and supply decreases (leftward shift), the net effect on equilibrium depends on the relative magnitude of these shifts.
• If the increase in demand is greater than the decrease in supply, then the rightward shift in demand will be larger than the leftward shift in supply.
• This means that the new equilibrium price and quantity will be influenced more by the demand shift.

Statement 2: True

• When demand increases more than supply decreases, there is a stronger push toward higher quantity demanded.
• Since supply has decreased, some restriction on quantity is expected, but the greater force of increased demand will still lead to a rise in equilibrium quantity.
• Thus, quantity rises, and price also increases.