Assuming supply is held constant, an increase in demand for a product will cause an increase in the equilibrium price and the amount bought and sold.

Question

Quizplus · Accepted Answer

If demand for a product increases while supply stays constant, there will be a shortage of the product at the current price, causing the price to rise. This increase in price will then incentivize suppliers to produce and sell more of the product, leading to an increase in the amount bought and sold. This is reflected in the new equilibrium point on the supply and demand graph, where the price and quantity are higher than before.

Assuming Supply Is Held Constant, an Increase in Demand for a Product