Assume a competitive market is in equilibrium.There is an increase in demand,but no change in supply.As a result the equilibrium price ________,and the equilibrium quantity ________.
A) rises; increases
B) rises; does not change
C) falls; does not change
D) falls; decreases
E) falls; increases

Question

Quizplus · Accepted Answer

An increase in demand, with no change in supply, will result in a shortage at the current equilibrium price. This will cause firms to increase their price to take advantage of the excess demand, leading to a rise in equilibrium price. As the price rises, the quantity demanded will decrease, while the quantity supplied will increase, leading to an increase in equilibrium quantity.

Assume a Competitive Market Is in Equilibrium