Question

Suppose the number of buyers in a market rises and a technological advancement occurs at the same time. What would we expect to happen in the market?

Answers:
A.
The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.

B.
The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.

C.
The equilibrium quantity would increase, but the impact on the equilibrium price would be ambiguous.

D.
Both the equilibrium quantity and the equilibrium price would increase.

Answer 1

In a market with a rise in the number of buyers and a technological advancement, both the equilibrium quantity and price are expected to increase.

Step-by-step explanation:

In a market where the number of buyers rises and a technological advancement occurs at the same time, we would expect both the equilibrium quantity and the equilibrium price to increase.

The increase in buyers will lead to an increase in demand, causing the demand curve to shift to the right.

At the same time, the technological advancement will lead to an increase in supply, causing the supply curve to shift to the right as well.

As a result, the equilibrium quantity will increase, and the impact on the equilibrium price will also be an increase, as the market reaches a new equilibrium point.