A leftward shift in supply and a leftward shift in demand would cause an unambiguous decrease in the equilibrium quantity in a market.

Question

Quizplus · Accepted Answer

If both supply and demand shift to the left, it means that the quantity supplied and the quantity demanded in the market have decreased. This would result in a decrease in the equilibrium quantity. Both a leftward shift in supply and a leftward shift in demand would cause a decrease in the equilibrium quantity. When supply shifts left, producers are willing to supply less at every price level, which reduces the quantity of goods supplied at the equilibrium price. Similarly, when demand shifts left, consumers are willing to buy less at every price level, which reduces the quantity of goods demanded at the equilibrium price. Therefore, the combination of these two shifts would lead to a decrease in the equilibrium quantity.

A Leftward Shift in Supply and a Leftward Shift in Demand