A simultaneous increase in both the demand for radios and the supply of radios would imply that
A)both the value of radios to consumers and the cost of producing radios has increased.
B)both the value of radios to consumers and the cost of producing radios has decreased.
C)the value of radios to consumers has decreased and the cost of producing radios has increased.
D)the value of radios to consumers has increased and the cost of producing radios has decreased.

Question

Quizplus · Accepted Answer

Simultaneous increase in demand and supply of radios means that there is an equilibrium shift towards the right, resulting in an increase in both the quantity supplied and the quantity demanded. This implies that both the value of radios to consumers and the ease/cost of producing radios have increased. Hence, the answer is choice D - the value of radios to consumers has increased and the cost of producing radios has decreased.

A Simultaneous Increase in Both the Demand for Radios and the Supply