A change in an equilibrium price can result from I. A change in demand
II) A change in supply
A) I only
B) II only
C) Both I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

According to the law of supply and demand, a change in either demand or supply will affect the equilibrium price. An increase in demand will cause the price to rise, while a decrease in demand will cause the price to fall. Similarly, an increase in supply will cause the price to fall, while a decrease in supply will cause the price to rise. Therefore, both I and II can result in a change in equilibrium price.

A Change in an Equilibrium Price Can Result from I