Demand Shift - Two Supply Curves 2

   Now let's consider the same demand shift but along supply curve SE.

   When demand shifts from D1 to D2 along SE price increases to P2 and quantity to Q2.

   An increase shift in demand always causes price and quantity to increase. However, if demand is elastic, quantity increases a great deal and price rises only modestly. If supply is inelastic, price increases considerably but quantity only increases modestly.

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