If both supply and demand increase at the same time, then
A) the price of the product will definitely increase.
B) the price of the product will definitely decline.
C) the market-clearing quantity of the product will definitely increase.
D) the market-clearing quantity of the product will definitely decrease.

Question

Quizplus · Accepted Answer

When both supply and demand increase, the market-clearing quantity (the amount of goods bought and sold) will definitely increase because there is more of the product available and more desire for it. The effect on price is uncertain without knowing the relative magnitudes of the changes in supply and demand.

If Both Supply and Demand Increase at the Same Time