Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases.What are we sure of?
A) Both equilibrium price and quantity increase.
B) Equilibrium price increases.
C) Equilibrium price decreases.
D) Equilibrium quantity increases.
E) Equilibrium quantity decreases.

Question

Quizplus · Accepted Answer

When both supply and demand increase, the equilibrium quantity will definitely increase. The effect on price is uncertain without knowing the relative magnitudes of the shifts in supply and demand.

Suppose Improvements in Technology Cause the Supply of Natural Gas