An increase in the demand for LED light bulbs due to changes in consumer tastes,accompanied by an increase in the supply of LED light bulbs as a result of government subsidies,will result in
A)an increase in the equilibrium quantity of LED light bulbs and no change in the equilibrium price.
B)an increase in the equilibrium price of LED light bulbs and no change in the equilibrium quantity.
C)an increase in the equilibrium price of LED light bulbs; the equilibrium quantity may increase or decrease.
D)an increase in the equilibrium quantity of LED light bulbs; the equilibrium price may increase or decrease.

Question

Quizplus · Accepted Answer

An increase in both demand and supply of LED light bulbs will lead to an increase in the equilibrium quantity of LED light bulbs. However, the equilibrium price may increase or decrease depending on the extent of the increase in demand and supply. If the increase in supply is greater than the increase in demand, the equilibrium price may decrease. On the other hand, if the increase in demand is greater than the increase in supply, the equilibrium price may increase. Therefore, there is a possibility of both an increase or decrease in equilibrium price, but the equilibrium quantity will increase.

An Increase in the Demand for LED Light Bulbs Due