Suppose that demand for a good increases and,at the same time,supply of the good decreases.What would happen in the market for the good?

Question

Quizplus · Accepted Answer

When demand for a good increases and supply decreases at the same time, it creates a shortage in the market. This will cause the equilibrium price to increase. However, the impact on equilibrium quantity is ambiguous because the decrease in supply could offset the increased demand. Thus, it is unclear if the quantity will increase, decrease or remain the same.

Suppose That Demand for a Good Increases And,at the Same