Equilibrium quantity will unambiguously increase when

Question

Quizplus · Accepted Answer

In each scenario presented in option A, demand either increases or stays the same while supply either stays the same or increases. In each of these cases, the equilibrium quantity will increase because there is more demand and/or more supply, which creates more transactions and, therefore, more output. Option B includes cases where either demand or supply decreases, which would decrease the equilibrium quantity. Option C includes cases where demand and/or supply decrease, which would also lead to a decrease in the equilibrium quantity. Option D includes cases where both demand and supply decrease, which would create a larger decrease in the equilibrium quantity than in the scenarios presented in option B.

Equilibrium Quantity Will Unambiguously Increase When