(solution) ‘‘An increase in demand will raise a good’s price and a fall in demand will lower it. That is all…

(solution) ‘‘An increase in demand will raise a good’s price and a fall in demand will lower it. That is all…

 ‘‘An increase in demand will raise a good’s price and a fall in demand will lower it. That is all you need to know—general equilibrium analysis is largely unnecessary.’’ Do you agree? How would you use Figure 10.3 to show how changes in demand affect price? Would using this figure tell you more than would using a simple supplydemand diagram?