Question

In 1 or 2 sentences, identify a change (either increase or decrease) in supply or demand that would cause the equilibrium price to increase.

Answer 1

Equilibrium price increases with increase in demand and/or decrease in supply.

Step-by-step explanation:

The equilibrium price is determined by the intersection of demand and supply. When the demand for a product increases, the demand curve shifts to the right.

This rightward shift in the demand curve causes the equilibrium price and quantity to increase as the new demand curve intersects the supply curve at a higher point.

A decrease in the supply causes the supply curve to move to the left. This leftward shift in the supply curve increases the equilibrium price and reduces the equilibrium quantity.

Answer 2

Changes in the supply or demand also changes the equilibrium price that is present. Increasing the demand would lead to an increase in equilibrium price. However, increasing the supply would lead to a decrease in price. So, to increase the price supply should be less.