In which of the following instances is the effect on equilibrium price (whether it rises, falls, or remains unchanged) dependent on the magnitude of the shifts in supply and demand?

Question

Quizplus · Accepted Answer

When both demand and supply increase, the effect on equilibrium price depends on the relative magnitudes of the shifts. If demand increases more than supply, the price will rise; if supply increases more than demand, the price will fall. If they increase equally, the price may remain unchanged.

In Which of the Following Instances Is the Effect on Equilibrium