An increase in price causes an increase in quantity supplied. An example is the case of high prices of gas. Over the Thanksgiving holiday, millions of people in America visit their friends and family y driving their cars. This is despite the price of gasoline is above $ 3.00 per gallon. Approximately 38.7 million of Americans, 1.5% last year traveled for at least 50 miles from their homes during the holiday. An increase in price per mile of travel increases the price of gas, there is also an increase in the miles traveled.
(http://www.envecon.net/s upply_demand.html).
An increase in price is caused by an increase in demand. Increase in demand is the only consistent thing with the increase in price and quantity. In case high price gas was driven by supply, the level of consumption would decrease. An increase in both demand and supply causes the curve to shift to the right. Buyers and sellers negotiate deals previously discussed after the changes, therefore, adjusting the quantity and price. The new price and quantity are compared to the previous one to see what transpired. The picture below shows an increase in demand which causes an increase in price and quantity (http://www.envecon.net/s upply_demand.html).
Delegate your assignment to our experts and they will do the rest.
An upward shift in the demand and supply curve has an effect on the equilibrium price and quantity. An upward movement of the demand curve means that demand increases and supply is held steady therefore increasing the equilibrium price and quantity. These academic predictions match the fact that Buyers buy more at low prices and sellers want to sell more at prices that are high ( http://www.envecon.net/s upply_demand.html ).
Reference
Environmental Economics (2017, May n.d). Econ 101: The Basic of Supply and Demand. Retrieved from: http://www.env-econ.net/supply_demand.html
