ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Price increases, quantity decreases
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price decreases, quantity increases
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price is decreases, quantity decreases
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price increases, quantity increases
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Detailed explanation-1: -If the increase in demand is more than the increase in supply, the equilibrium price increases. If the increase in demand is less than the increase in supply, the equilibrium price decreases. In both cases, equilibrium quantity increases. Q.
Detailed explanation-2: -However, when demand increases and supply remains the same, the higher demand leads to a higher equilibrium price and vice versa. Supply and demand rise and fall until an equilibrium price is reached.
Detailed explanation-3: -An increase in demand, all other things unchanged, will cause the equilibrium price to rise; quantity supplied will increase. A decrease in demand will cause the equilibrium price to fall; quantity supplied will decrease.
Detailed explanation-4: -When the increase in supply is equal to increase in demand the equilibrium price will remain the dame at OP but the equilibrium Quantity will increase from Q1 to Q2. Was this answer helpful?