Figure 4-4
-An increase in demand will have what effect on equilibrium price and quantity?
A)Price will increase; quantity will decrease.
B)Price will decrease; quantity will increase.
C)Both price and quantity will increase.
D)Both price and quantity will decrease.

Question

Figure 4-4 
-An increase in demand will have what effect on equilibrium price and quantity?
A)Price will increase; quantity will decrease. 
B)Price will decrease; quantity will increase. 
C)Both price and quantity will increase. 
D)Both price and quantity will decrease.

Quizplus · Accepted Answer

An increase in demand results in a shift to the right of the demand curve, leading to a new equilibrium point with a higher quantity and a higher price. Therefore, both price and quantity will increase.

Figure 4-4 -An Increase in Demand Will Have What Effect on Equilibrium