1. The Impact on Price or Quantity will be uncertain
When Both Curves Shift
The Impact on Price or Quantity will be uncertain

2. When Both S & D Curves Shift:
1 variable is predictable (price or quantity)
The other variable is indeterminate
Equilibrium Price
Equilibrium Quantity
2 Variables: or
One is indeterminate
(whenever both curves shift)

3. To solve multiple curve shifts:
Step #1: Determine the effect each curve shift has separately on:
Equilibrium Price & Quantity
Step #2: The variable that moves in opposite directions is indeterminate
Price or Qty

4. Step #1: Determine single curve shift impact on variables
Equilibrium
DEMAND Shift in Curve Price Qty
Increases R
Decreases L
Equilibrium
SUPPLY Shift in Curve Price Qty
Increases R
Decreases L

5. Example: Assume both Demand & Supply Decrease
DEMAND Shift in Curve Price Qty
Decreases
left
SUPPLY Shift in Curve Price Qty
Decreases
left
Quantity must fall as both S & D => P↓
Price is Indeterminate as S => P↑ but D => P↓
You would need to know the magnitude of the shift to solve both!

6. Result if both shifts occur: Result if only one shift happens:Q2 D2 S1 S2 Q2 P2
Quantity
must increase. P1
Price is
Indeterminate D1
Variable that moves
in opposite directions
is indeterminate Q
Qty
Result if only one shift happens:
Increase in demand: P
Qty
Increase in supply: P
Qty

7. 2 Practice Problems