I was wondering if someone could write me a clear paragraph answering this question?
Examine the impact on the equilibrium price and quantity of a product (or service) of an increase in the number of consumers in the market.
I am struggling to write a paragraph on this, much appreciated!!!
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Market Equilibrium watch
- Thread Starter
- 24-10-2015 23:31
- 25-10-2015 01:29
Alright so first of all an increased in numbers of consumers means quantity demanded goes up ( demand curve shifts to the right) we then have excess demand, so the price goes up to allow the market to clear and a new equilibrium is formed. Ok now the paragraph
The equilibrium price is where the market clears. If there was an increased amount of consumers in the market, the quantity demanded of the good would increase. On a supply and demand diagram, this equates to a shift of demand to the right. The new equilibrium is formed where the new demand curve meets the supply curve, this creates an increase is price, and a increase in quantity demanded