Refer to the accompanying figure. If demand shifts from D1 to D2, and at the same time, supply shifts from S1 to S2, then according to the figure:
A)the equilibrium quantity will increase and the equilibrium price will decrease.
B)the equilibrium quantity will increase and the equilibrium price will increase.
C)the equilibrium quantity will decrease and the equilibrium price will increase.
D)the equilibrium quantity will decrease and the equilibrium price will decrease.

Question

Refer to the accompanying figure. If demand shifts from D1 to D2, and at the same time, supply shifts from S1 to S2, then according to the figure: 
A)the equilibrium quantity will increase and the equilibrium price will decrease. 
B)the equilibrium quantity will increase and the equilibrium price will increase. 
C)the equilibrium quantity will decrease and the equilibrium price will increase. 
D)the equilibrium quantity will decrease and the equilibrium price will decrease.

Quizplus · Accepted Answer

In the figure, the increase in demand is greater than the increase in supply. Thus, the new equilibrium price and quantity will both be higher.

Refer to the Accompanying Figure