Question

When the demand for a good or service increases, the result is which of the following?

A. Equilibrium price decreases and quantity increases.
B. Equilibrium price increases and quantity decreases.
C. Equilibrium price and quantity both decrease.
D. Equilibrium price increases and quantity increases.
E. Equilibrium price and quantity remain the same.

Answer 1

When the demand for a good or service increases, the equilibrium price and quantity both increase.

Step-by-step explanation:

When the demand for a good or service increases, the result is option D: Equilibrium price increases and quantity increases. This is because when demand increases, buyers are willing to pay a higher price for the good or service, resulting in an increase in price. As a result, suppliers are motivated to produce more of the good or service to meet the higher demand, leading to an increase in quantity supplied.