Given a downward-sloping demand curve and an upward-sloping supply curve,an increase in supply together with an increase in demand will cause the
A)Equilibrium quantity purchased to increase,but the effect on price will be indeterminate
B)Equilibrium quantity purchased to decrease,but the effect on price will be indeterminate
C)Price to rise,but the effect on the equilibrium quantity purchased will be indeterminate
D)Price to fall,but the effect on the quantity bought and sold will be indeterminate
E)Equilibrium price to rise and the equilibrium quantity purchased will rise

Question

Quizplus · Accepted Answer

When both supply and demand increase, the equilibrium quantity will definitely increase because both shifts support a higher quantity being bought and sold. However, the effect on price is indeterminate without knowing the relative magnitudes of the shifts in supply and demand.

Given a Downward-Sloping Demand Curve and an Upward-Sloping Supply Curve,an