# af21a

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Ok, for question 2.1,
the question is
Here below are 4 small questions of 2.1.
For 2.1a,
In this case,
both demand and supply increase.
Ok, in this question,
the question asks how their price
That means
the wage rate of the engineer
and the quantity of engineering graduates who get a job
will change.
As both supply and demand increase,
the supply curve and the demand curve will both shift to the right.
But how do equilibrium market price and quantity change?
There are 2 circumstances.
Here is the first case.
When the demand shifts more,
in this case,
Blue curve and Red curve represent the original demand curve D0 and original supply curve S0 respectively.
and Green curve and Purple curve represent the new demand curve D1 and new supply curve S1 respectively.
We can see
the demand curve shifts more.
the demand curve
Blue and Green here
The gap between them
is larger.
That means
the demand curve shifts more
and the supply curve here
the gap between them is smaller.
That means
they shift less.
Therefore,
it results in an increase in equilibrium market price and the equilibrium quantity increases.
In case 2,
the supply shifts more
We can see
the red and the purple curve here
The gap between them is larger than the gap between the demand curves.
Therefore,
the equilibrium price decreases and also the equilibrium quantity increases.
The intersection point here
The x-coordinate represents the equilibrium price.
Therefore in this case,
decreases
and the case one here
the intersection point increases.
Therefore,
the equilibrium market price increases.
Ok, for question 2.1b to 2.2b,
I will let Mr Mok discuss them.
Mr Mok, please~