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What happens to equilibrium when price and quantity increases?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.
What causes an increase in equilibrium price and decrease in equilibrium quantity?An increase in demand and a decrease in supply will cause an increase in equilibrium price, but the effect on equilibrium quantity cannot be detennined. 1. For any quantity, consumers now place a higher value on the good,and producers must have a higher price in order to supply the good; therefore, price will increase.
What happens to equilibrium when demand rises and supply stays the same?If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price. If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.
Which of the following will definitely lead to an increase in both equilibrium price and equilibrium quantity?The correct option is E) An increase in demand combined with a decrease in supply. When demand for a product increases, it causes a rightwards shift in the demand curve where both the price and quantity rise.
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