As a result of an increase in both supply and demand, the equilibrium price decreases while the equilibrium quantity increases.

Question

Quizplus · Accepted Answer

When both supply and demand increase, the equilibrium quantity will increase, but the effect on equilibrium price is indeterminate without knowing the relative magnitudes of the shifts in supply and demand. If the increase in supply is larger than the increase in demand, the price could decrease, but if the increase in demand is larger, the price could increase.

As a Result of an Increase in Both Supply and Demand