If there is an increase in both the supply and demand for a good, which of the following will definitely occur?
A) The price of the good will increase.
B) The price of the good will decrease.
C) The equilibrium quantity will increase.
D) The equilibrium quantity will decrease.

Question

Quizplus · Accepted Answer

When both supply and demand increase, the equilibrium quantity will definitely increase, as both shifts lead to a higher quantity. The effect on price is indeterminate without knowing the relative magnitudes of the shifts.

If There Is an Increase in Both the Supply and Demand