An increase in both supply and demand must increase both equilibrium price and quantity.

Question

Quizplus · Accepted Answer

While an increase in both supply and demand will typically increase the equilibrium quantity, the effect on equilibrium price is ambiguous and depends on the relative magnitudes of the shifts in supply and demand. If the increase in demand is larger than the increase in supply, the price will increase. If the increase in supply is larger than the increase in demand, the price will decrease.

An Increase in Both Supply and Demand Must Increase Both