Suppose demand increases and supply decreases.What will happen to equilibrium price and quantity?

Question

Quizplus · Accepted Answer

When demand increases and supply decreases, it results in an increase in equilibrium price. However, the effect on equilibrium quantity is ambiguous because the increase in demand and decrease in supply both lead to an increase in quantity, but the decrease in supply can offset the increase in quantity due to the increase in demand. Therefore, the equilibrium quantity may either increase or decrease, depending on the magnitude of the individual effects.

Suppose Demand Increases and Supply Decreases