Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:
A)an increase in price and an increase in quantity exchanged.
B)no change in price and an increase in quantity exchanged.
C)a decrease in price and a decrease in quantity exchanged.
D)no change in price, and an indeterminate change in quantity exchanged.

Question

Assuming that the demand and supply of a good have moved in the same direction, and by the same amount, the new equilibrium would represent:
A)​an increase in price and an increase in quantity exchanged.
B)​no change in price and an increase in quantity exchanged.
C)​a decrease in price and a decrease in quantity exchanged.
D)​no change in price, and an indeterminate change in quantity exchanged.

Quizplus · Accepted Answer

When demand and supply move by the same amount in the same direction, there is no change in the equilibrium price. However, the quantity exchanged can increase or decrease, depending on the magnitude of the shift. Therefore, the answer is no change in price and an indeterminate change in quantity exchanged, which is option D.

Assuming That the Demand and Supply of a Good Have