If we observe an increase in the equilibrium quantity of good A, we know that

Question

Quizplus · Accepted Answer

An increase in equilibrium quantity can only be caused by an increase in both demand and supply or an increase in either demand or supply. Therefore, either the demand for A has increased, the supply of A has increased or both have increased. Option B encompasses this range of possibilities. The option E is not even relevant to this situation.

If We Observe an Increase in the Equilibrium Quantity of Good