Suppose both demand and supply increase.What will happen to price?

Question

Quizplus · Accepted Answer

When both demand and supply increase, the price will increase only if demand increases more than supply does. This is because the increase in demand will lead to an increase in the equilibrium quantity, but the increase in supply will also lead to an increase in the equilibrium quantity. If demand increases more than supply does, then the equilibrium price will increase, but if supply increases more than demand does, then the equilibrium price will decrease.

Suppose Both Demand and Supply Increase