For substitute goods, using demand & supply diagrams. what will happen to the equillibrium price & quantity?

Answer 1

Ok, here is a quick rundown on this topic.
If a substitute good becomes more desirable, demand increases for the substitute. Thus, it shifts upward or to the right, depending on the terminology you use. The equilibrium price increases as well as the quantity. Supply will stay the same. In the long run, supply will increase, as the higher price will entice new suppliers into the market. The price would then fall back to its original level at a higher quantity.

The good being substituted will become less desirable, demand will decrease and shift down or to the left. The equilibrium price will decrease as well as quantity. Supply will stay the same in the short term. In the long run, supply may shrink, as some producers may drop out of the market, causing supply to decrease and thus propping back up the market price, albeit at a lower quantity.

Hope this helps.

Answer 2

the classical answer is as grant will develop, relative cost of the provision decreases ("call for" shrink). that's "grant v. call for". great call for with low grant = bigger cost. low call for with severe grant = decrease cost. whether, that's overly generic, because it relies upon on the pliability of call for. Take a hypothetical occasion. If a manufacturing unit produces a hundred wigits an afternoon, for a hundred people. each individual is barely capacble, aspiring to apply one widgit an afternoon. If grant will develop, it would not inevitably result call for. The call for in that occasion remains consistent. In a greater classic occasion, if call for remains consistent, say for oil, and grant decreases (say a typhoon wipes out refinery skill), cost is going up, as there is way less grant to fulfill the call for. on your particular question, the respond relies upon on the character of the call for if the present grant has artificially decreased call for by skill of being priced out of attain, then further grant might shrink cost and develop call for, as people who ought to no longer in many situations have afforded that gallon of gas, now can on the decrease cost.