Consider a market that is in equilibrium.If it experiences both an increase in demand and a decrease in supply,what can be said of the new equilibrium?

Question

Quizplus · Accepted Answer

When demand increases, the equilibrium quantity will increase and the equilibrium price will rise. When supply decreases, the equilibrium price will increase and the equilibrium quantity will decrease. Therefore, the new equilibrium will definitely have a higher price, but the quantity cannot be predicted without more information.

Consider a Market That Is in Equilibrium