Question

Suppose there is an increase in demand in a market and no change in the supply. What will happen to the market equilibrium price and quantity?
A. Equilibrium price will rise; equilibrium quantity will fall
B. Equilibrium price will fall; equilibrium quantity will fall
C. Equilibrium price will fall; equilibrium quantity will rise
D. Equilibrium price will rise; equilibrium quantity will rise

Answer 1

Answer:

Option (D) is correct.

Explanation:

If there is an increase in the demand for a commodity and no change in the supply of the commodity then as a result there is a rightward shift in the demand curve for a commodity.

Therefore, this rightward shift in the demand curve will increase the equilibrium price of the commodity and equilibrium quantity of the commodity in an economy.