Assuming that the demand and supply of a good both increased by the same amount, the new equilibrium would represent:
A)an increase in price and an increase in quantity exchanged.
B)no change in price and an increase in quantity exchanged.
C)a decrease in price and a decrease in quantity exchanged.
D)no change in price, and an indeterminate change in quantity exchanged.

Question

Assuming that the demand and supply of a good both increased by the same amount, the new equilibrium would represent:
A)​an increase in price and an increase in quantity exchanged.
B)​no change in price and an increase in quantity exchanged.
C)​a decrease in price and a decrease in quantity exchanged.
D)​no change in price, and an indeterminate change in quantity exchanged.

Quizplus · Accepted Answer

If the demand and supply both increase by the same amount, the equilibrium price would remain the same as there is no change in the relative strength of demand and supply. However, the quantity exchanged will increase as both the demand and supply have increased. Therefore, there would be no change in price but an increase in quantity exchanged.

Assuming That the Demand and Supply of a Good Both