Suppose demand increases and supply increases. Which of the following will happen?
A) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease.
B) Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase.
C) Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase.
D) Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease.
E) The change in equilibrium price and quantity cannot be determined.

Question

Quizplus · Accepted Answer

When both demand and supply increase, the equilibrium quantity will definitely increase, but the change in equilibrium price is uncertain as it depends on the relative magnitudes of the shifts in demand and supply.

Suppose Demand Increases and Supply Increases