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How does equilibrium price and equilibrium quantity when demand and supply increase simultaneously?Answer: In case of simultaneous changes in demand and supply, if the increase in demand is more than the increase in supply, then as we have seen in Fig. 1(b) above, the new equilibrium price becomes higher than the original equilibrium price.
How is the equilibrium price and equilibrium quantity of a commodity affected when increase is demand is more than increase in supply explain with the help of a diagram?At a higher price quantity demanded will fall and quantity supplied will increase resulting in upward movement along new demand curve and given supply curve. This reduces the gap between quantity demanded and quantity supplied.
What are the effects of simultaneous increase in demand and supply?If both demand and supply increase, there will be an increase in the equilibrium output, but the effect on price cannot be determined. 1. If both demand and supply increase, consumers wish to buy more and firms wish to supply more so output will increase.
How is the equilibrium price of a commodity affected by an increase in the supply of the commodity?When supply of a commodity increases and its demand remains the same, equilibrium price will decrease and equilibrium quantity demanded and supplied will increase. equilibrium price will increase but equilibrium quantity demanded and supplied will decrease.
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