An increase in the demand for notebooks raises the quantity of notebooks demanded but not the quantity supplied.

“An increase in the demand for notebooks raises the quantity of notebooks demanded but not the quantity supplied.” Is this statement true or false? Explain in details.

Expert Solution

An increase in the demand for notebooks raises the quantity of notebooks demanded but not the quantity supplied. It is false statement.

An increase in the demand for notebooks raises, the demand curve shift to the right. Both the quantity supplied and quantity demanded increases. This can be shown in the following figure;

In the bove figure x-axis shows quantity and y -axis shows price. D is the demand curve S is the supply curve. E is the initial equilibrium point. As the result of increase in demand, the demand curve shift to the right. The price increases from p to p1 and quantity increases from q to q1. Here both the quantity demanded and quantity supplied increases.

Rahul Sunny answered 2 years ago

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