The demand function for abalone is q = 30 - 9p and the supply function is q = 6p.Suddenly the yuppies discover abalone.The quantity demanded at every price doubles.The supply function, however, remains the same as before.What is the effect on the equilibrium price and quantity?
A)The price doubles and the quantity remains constant.
B)The quantity doubles and the price remains constant.
C)Both price and quantity double.
D)Both price and quantity increase but neither doubles.
E)None of the above.

Question

Quizplus · Accepted Answer

When demand doubles while supply remains constant, both the equilibrium price and quantity will increase, but not necessarily double. This is because the new equilibrium is found where the new demand curve intersects the unchanged supply curve, leading to adjustments in both price and quantity.

The Demand Function for Abalone Is Q = 30 -