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Match List-I with List-II

Change in Demand or SupplyEffect on equilibrium price / equilibrium quantity
(A) Increase in demand > Increase in supply(I) equilibrium price will rise but no change in equilibrium quantity.
(B) Increase in supply when demand is perfectly inelastic(II) No change in equilibrium price.
(C) Same proportion of increase in demand and supply(III) equilibrium price will fall but no change in equilibrium quantity.
(D) Increase In demand when supply is perfectly inelastic(IV) equilibrium price and quantity will rise.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 1

(A) Increase in demand > Increase in supply -> When demand increases more than supply, both price and quantity rise as the demand shift dominates.

(B) Increase in supply when demand is perfectly inelastic -> With a vertical demand curve, increased supply only lowers price; quantity cannot change.

(C) Same proportion of increase in demand and supply -> Equal rightward shifts of both curves increase quantity but leave price unchanged as the effects offset.

(D) Increase in demand when supply is perfectly inelastic -> With a vertical supply curve, increased demand only raises price; quantity cannot change.


Hence, Option 1: (A) - (IV), (B) - (III), (C) - (II), (D) - (I) -> (A) matches (IV) as both price and quantity increase when demand increase exceeds supply increase. (B) matches (III) because perfectly inelastic demand means quantity is fixed, so more supply only reduces price. (C) matches (II) as proportional increases in demand and supply balance each other's price effects while increasing quantity. (D) matches (I) because perfectly inelastic supply fixes quantity, so more demand only increases price. -> correct

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