An increase in both supply and demand causes which of the following?
A) Equilibrium price falls.
B) Equilibrium price rises.
C) Equilibrium price change is indeterminate.
D) Equilibrium quantity change is indeterminate.

Question

Quizplus · Accepted Answer

DWhen both supply and demand increase, the effect on equilibrium price is indeterminate without knowing the relative magnitude of the shifts in supply and demand. However, the equilibrium quantity will definitely increase as both shifts support a higher quantity being traded in the market.

An Increase in Both Supply and Demand Causes Which of the Following