Ceteris paribus, an increase in both equilibrium price and quantity is a consequence of:

Question

Quizplus · Accepted Answer

An increase in both equilibrium price and quantity is a consequence of an increase in demand. When the demand for a product increases, the market price of the item also goes higher, and the quantity of the good supplied will also rise.

Note: An increase in both equilibrium price and quantity cannot be caused by a decrease in demand or supply or an increase in both demand and supply. If the demand decreases, then both the equilibrium price and quantity will decrease, if the supply decreases, then the equilibrium price will increase, but the quantity will decrease, and if there is an increase in both demand and supply, the effect on equilibrium price and quantity will depend on the magnitude of the increase in demand and supply.

Ceteris Paribus, an Increase in Both Equilibrium Price and Quantity