Match List-I with List-II
List-I List-II (A) Leftward shift in both the supply and demand curve (I) Equilibrium price remains unchanged (B) Rightward shift in both supply and demand curve (II) Equilibrium quantity increases (C) Equal percentage of increase in both demand and supply curves (III) Equilibrium quantity decreases (D) Shifts in supply curve towards right and demand curve shifts left (IV) Equilibrium quantity remains unchanged
Choose the correct answer from the options given below:
Match List-I with List-II
| List-I | List-II |
|---|---|
| (A) Leftward shift in both the supply and demand curve | (I) Equilibrium price remains unchanged |
| (B) Rightward shift in both supply and demand curve | (II) Equilibrium quantity increases |
| (C) Equal percentage of increase in both demand and supply curves | (III) Equilibrium quantity decreases |
| (D) Shifts in supply curve towards right and demand curve shifts left | (IV) Equilibrium quantity remains unchanged |
Choose the correct answer from the options given below:
Solution
Option 1 -> (A)-(I), (B)-(II), (C)-(III), (D)-(IV) - Incorrect matching. Leftward shifts in both curves decrease quantity, not keep price unchanged.
Option 2 -> (A)-(I), (B)-(III), (C)-(II), (D)-(IV) - Incorrect. Rightward shifts increase quantity, not decrease it.
Option 3 -> (A)-(I), (B)-(II), (C)-(IV), (D)-(III) - Incorrect. Equal percentage increases keep price unchanged, not quantity.
Option 4 -> (A)-(III), (B)-(II), (C)-(I), (D)-(IV) - Correct matching of all scenarios.
Hence, Option 4: (A) - (III), (B) - (II), (C) - (I), (D) - (IV) -> (A) When both curves shift left, demand and supply both decrease, resulting in lower equilibrium quantity. (B) When both curves shift right, demand and supply both increase, resulting in higher equilibrium quantity. (C) When both curves increase by equal percentage, the proportional shifts cancel out the price effects, keeping equilibrium price unchanged while quantity increases. (D) When supply increases (right shift) and demand decreases (left shift), if shifts are equal, the quantity effects offset each other, keeping equilibrium quantity unchanged while price definitely falls. -> correct
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