We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will increase when
A) supply increases and demand decreases.
B) supply and demand for a product simultaneously decrease.
C) supply and demand for a product simultaneously increase.
D) supply decreases and demand increases.

Question

Quizplus · Accepted Answer

When both supply and demand for a product simultaneously increase, the equilibrium quantity will increase. However, we cannot predict the effect on the market clearing price as it depends on the magnitude of the shifts in supply and demand.

We Cannot Predict the Effect on the Market Clearing Price