Decreases or shifts back in demand and supply both reduce equilibrium quantity. Therefore, we can predict that the equilibrium quantity will fall when both supply and demand decrease. But, a reduction in demand reduces the equilibrium price, while a reduction in supply raises the equilibrium price. Thus, the change in equilibrium price is indeterminate.

    In the graph the equilibrium price increases slightly. However, it could just as well have decreased had demand shifted back a bit more. Therefore, the change in equilibrium price could increase, decrease or remain the same depending on the amount of each shift. Hence, the indeterminacy of the equilibrium price.

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