Assume that both the demand curve and the supply curve for tablet computers shift to the right, but the demand curve shifts more than the supply curve. As a result:
A)both the equilibrium price and quantity of tablet computers will increase.
B)the equilibrium price of tablet computers will increase; the equilibrium quantity may increase or decrease.
C)the equilibrium price of tablet computers may increase or decrease; the equilibrium quantity will increase.
D)the equilibrium price of tablet computers will decrease; the equilibrium quantity may increase or decrease.

Question

Quizplus · Accepted Answer

Both the demand curve and the supply curve shift to the right, but the demand curve shifts more than the supply curve. This means that the quantity demanded at any given price is now higher than before, and the quantity supplied at any given price is also higher than before. However, the increase in demand is greater than the increase in supply, so the equilibrium price will increase. The equilibrium quantity may increase or decrease, depending on the relative magnitudes of the shifts in the demand and supply curves.

Assume That Both the Demand Curve and the Supply Curve