Without the aid of a graph,one can say definitively that,if supply increases while demand decreases simultaneously,the new equilibrium price is ___________ and the new equilibrium quantity is _________________.
A) lower;lower
B) lower;indeterminate
C) indeterminate;higher
D) indeterminate;lower
E) higher;indeterminate

Question

Quizplus · Accepted Answer

When supply increases, it tends to lower the price, while a decrease in demand also tends to lower the price. Therefore, the new equilibrium price is definitively lower. However, the effect on equilibrium quantity is indeterminate without knowing the relative magnitudes of the shifts in supply and demand.

Without the Aid of a Graph,one Can Say Definitively That,if