If the supply curve does not shift,an increase in demand results in a(n)
A) increase in equilibrium price and a decrease in equilibrium quantity
B) decrease in equilibrium price and a decrease in equilibrium quantity
C) increase in equilibrium price and an increase in equilibrium quantity
D) decrease in equilibrium price and an increase in equilibrium quantity
E) increase in supply

Question

Quizplus · Accepted Answer

If the supply curve does not shift, an increase in demand will lead to a higher equilibrium price and a larger equilibrium quantity. This is because, as demand increases, buyers are willing to pay more for the good or service, leading to a higher price. As producers see the higher price, they are incentivized to produce more, leading to a larger quantity being supplied. Therefore, the equilibrium price and quantity both increase. Choice C is the only option that represents this outcome.

If the Supply Curve Does Not Shift,an Increase in Demand