Suppose that demand for tablets increases, and simultaneously, the supply of tablets increases. Which of the following would you conclude definitely will occur in the market for tablets?
A)The market clearing price will rise.
B)The market clearing price will fall.
C)The equilibrium quantity will rise.
D)The equilibrium quantity will fall.

Question

Quizplus · Accepted Answer

When both demand and supply increase, the equilibrium quantity will definitely increase. However, the market clearing price may either rise, fall or remain unchanged depending on the magnitude of the increase in demand and supply. Therefore, we cannot conclude whether the price will rise, fall or remain unchanged.

Suppose That Demand for Tablets Increases, and Simultaneously, the Supply