If a market is in equilibrium and then demand increases while supply decreases,the change in the equilibrium price is ________ and the change in the equilibrium quantity is _________.
A) positive;positive
B) positive;negative
C) positive;indeterminate
D) indeterminate;positive
E) negative;negative

Question

Quizplus · Accepted Answer

When demand increases and supply decreases, the equilibrium price will definitely rise due to higher demand and lower supply. However, the change in equilibrium quantity is indeterminate because it depends on the relative magnitudes of the shifts in demand and supply.

If a Market Is in Equilibrium and Then Demand Increases