In the figure given below, D 1 and S 1 are the initial demand and supply curves for a commodity in the market.Figure 3.3

-If both supply and demand for a good increase, which of the following will definitely happen?
A)Equilibrium price will remain the same
B)Equilibrium price will increase
C)Equilibrium price will decrease
D)Equilibrium quantity will increase
E)Equilibrium quantity will decrease

Question

In the figure given below, D 1 and S 1 are the initial demand and supply curves for a commodity in the market.Figure 3.3
​
 
-If both supply and demand for a good increase, which of the following will definitely happen?
A)Equilibrium price will remain the same 
B)Equilibrium price will increase 
C)Equilibrium price will decrease 
D)Equilibrium quantity will increase 
E)Equilibrium quantity will decrease

Quizplus · Accepted Answer

When both supply and demand for a good increase, the equilibrium quantity will definitely increase. However, it is uncertain how the equilibrium price will be affected, as it will depend on the magnitude of the shifts in both curves. It is possible for the equilibrium price to either increase, decrease, or remain the same. Therefore, options A, B, and C are not definite outcomes when both supply and demand increase.

In the Figure Given Below, D1 and S1 Are the Initial

In the Figure Given Below, D₁ and S₁ Are the Initial