With respect to the market clearing price and the equilibrium quantity of good X, increases in the demand for and the supply of good X will definitely
A)increase the market clearing price of good X but have an uncertain impact on the equilibrium quantity of X.
B)reduce the market clearing price and the equilibrium quantity of good X.
C)increase the market clearing price and the equilibrium quantity of good X.
D)increase the equilibrium quantity of good X but have an uncertain impact on the market clearing price of X.

Question

Quizplus · Accepted Answer

When both demand and supply increase, the equilibrium quantity will definitely increase, but the effect on price is uncertain as it depends on the relative magnitudes of the shifts in demand and supply.

With Respect to the Market Clearing Price and the Equilibrium