We have seen that when supply or demand shifts, we can predict the direction of change in price and quantity. The table below summarizes what we have learned from the preceeding graphs in this section.

We can use our understanding of supply and demand to reason in the reverse direction. For example, if we observe that in some market price is falling and so are quantities sold, the most likely cause is something that would lead to a shift back in demand. On the other hand, if we observe price falling and quantity sold rising, we should look for an explanation that is consistent with a shift out in supply. An increase in both price and quantity sold is consistent with an increase in demand, and an increase in price with a reduction in quantity sold is almost certainly due to a shift back in supply.