What happens to the equilibrium price and quantity when demand increases and simultaneously supply decreases, and the relative size of the shifts is not known?

Question

Quizplus · Accepted Answer

When demand increases, the equilibrium price will tend to rise. On the other hand, when supply decreases, the equilibrium price will tend to rise as well. Thus, the two effects work in opposite directions, and it is not possible to predict the overall effect on the equilibrium price without knowledge of the relative magnitude of the two shifts. However, the increase in demand will definitely cause an increase in equilibrium quantity, while the decrease in supply will decrease the equilibrium quantity. Therefore, the change in the equilibrium quantity is ambiguous.

What Happens to the Equilibrium Price and Quantity When Demand