If both the supply and demand for computer games increase, then the equilibrium price of the games:
A)is indeterminate and the equilibrium quantity rises.
B)is indeterminate and the equilibrium quantity falls.
C)falls and the equilibrium quantity also falls.
D)falls and the change in equilibrium quantity is indeterminate.

Question

If both the supply and demand for computer games increase, then the equilibrium price of the games:
A)​is indeterminate and the equilibrium quantity rises.
B)​is indeterminate and the equilibrium quantity falls.
C)​falls and the equilibrium quantity also falls.
D)​falls and the change in equilibrium quantity is indeterminate.

Quizplus · Accepted Answer

When both supply and demand for a product increase, the equilibrium quantity will definitely rise because more of the product is being produced and more of it is wanted. However, the effect on price is indeterminate without knowing the relative magnitudes of the shifts in supply and demand.

If Both the Supply and Demand for Computer Games Increase