Suppose that the equilibrium price and quantity of new houses both increase.Which of the following could be a cause of this change?

Question

Quizplus · Accepted Answer

When the demand for new houses increases and the supply remains unchanged, it creates an excess demand situation in the market, which leads to an increase in both price and quantity. This is because consumers are willing to pay a higher price to secure a new house, while suppliers are willing to increase the quantity to capture higher profits.

Suppose That the Equilibrium Price and Quantity of New Houses