Question

How would you need to shift the supply and demand curves in a market to result in a situation where equilibrium quantity increases while the equilibrium price change is indeterminate?
a. Supply must increase while demand decreases.
b. Either supply or demand must increase.
c. Both supply and demand must increase.

Answer 1

Answer:

C

Explanation:

An increase in supply would lead to a rightward shift of the supply curve. As a result price decreases and quantity increases.

An increase in demand leads to a rightward shift of the demand curve. As a result, equilibrium price and quantity increases.

Taking these two effects together, there is an increase in equilibrium quantity and an indeterminate change in equilibrium price