If the demand curve is horizontal and the supply curve is ...

[DelorasTo]

If the demand curve is horizontal and the supply curve is vertical, shifts of the supply curve will lead to
 
  A) changes in the equilibrium quantity only.
  B) changes in the equilibrium price only.
  C) changes in both the equilibrium price and quantity.
  D) changes in the quantity demanded only.

Question 2

Tastes are starting to change for hybrid vehicles such that consumers are purchasing more hybrid vehicles and suppliers are choosing to produce more hybrid vehicles than they were five years ago. Due to the change in tastes, equilibrium price has fallen and equilibrium quantity has increased relative to the hybrid market from five years ago. What is the likely cause of this result?
 
  A) Supply increased by more than demand.
  B) Demand increased by more than supply.
  C) Demand and supply increased by the same amount.
  D) Only supply increased.

[Brummell1998]

Answer to Question 1

A

Answer to Question 2

A