Does a rise in demand raise quantity demanded but not quantity supplied?

Verdict. The statement is false, as long as the supply curve of notebooks slopes upward. A rise in the demand for notebooks raises the price, and the higher price raises the quantity supplied as well as the quantity demanded: in the new equilibrium the two are equal again, at a larger quantity.

What a rise in demand means. A rise (increase) in demand is a shift of the whole demand curve to the right, caused by something other than the price of notebooks, for example the start of the school term or a rise in students' incomes; at every price, buyers now want more notebooks.

What happens in the market. Our own figures for a city market:

• Before the shift the market clears at ₹40 a notebook, with 10,000 notebooks a week demanded and supplied.
• The new term begins and, at ₹40, buyers now want 13,000. There is an excess demand of 3,000 notebooks at the old price.
• Some buyers are willing to pay more, so the price rises. As it rises, two things happen together:
  • sellers move up along their supply curve: a higher price makes it worth producing and offering more notebooks, so the quantity supplied rises (the supply curve itself does not shift);
  • buyers move up along the new demand curve, so the quantity demanded falls back from 13,000.
• Suppose the market clears again at ₹45 with 11,500 notebooks. Compared with the old equilibrium, the quantity demanded has risen (10,000 to 11,500) and so has the quantity supplied (10,000 to 11,500). With a rightward shift in demand and supply unchanged, both the equilibrium price and the equilibrium quantity rise.

So the statement is right that the quantity demanded rises, but wrong that the quantity supplied does not: the rise in quantity supplied is a movement along the supply curve, caused by the higher price. What does not change is supply, the supply curve itself.

When the statement would hold. Only if the supply of notebooks were perfectly inelastic (a vertical supply curve, for instance a fixed stock that cannot be added to in the short period). Then the rise in demand would raise only the price; but then the quantity bought in equilibrium could not rise either, since buyers can buy only what is supplied. So even in this case the first half of the statement fails.

Conclusion. False. A rise in demand (a rightward shift of the demand curve) raises the price, and through the price it raises the quantity supplied along an unchanged supply curve; equilibrium quantity demanded and quantity supplied both rise. The statement confuses an unchanged supply with an unchanged quantity supplied.