Bringing Supply and Demand Together

An increase in supply decreases the equilibrium price and increases the equilibrium quantity.

• An increase in supply decreases the equilibrium price and increases the equilibrium quantity.
• A decrease in demand decreases both the equilibrium price and quantity.
• Taken together, they will decrease the equilibrium price, but result in an indeterminate change in the equilibrium quantity.

It is also possible that both supply and demand will increase (or decrease).

• It is also possible that both supply and demand will increase (or decrease).
• As a result of technological breakthroughs and new factories manufacturing flat screen LCD televisions, the supply curve for LCD televisions shifted to the right.
• But with rising income and an increasing number of buyers, the demand increased as well.
• Both the increased demand and the increased supply functioned to increase the equilibrium quantity.