1. An increase in both demand and supply:
- Response: An increase in both equilibrium price and quantity.
2. An increase in demand:
- Response: An increase in both equilibrium price and quantity.
3. A decrease in demand:
- Response: A decrease in both equilibrium price and quantity.
4. An increase in supply:
- Response: An increase in both equilibrium price and quantity.
5. A decrease in equilibrium price but an increase in equilibrium quantity:
- Response: A decrease in price but an increase in quantity at equilibrium.
If there is an increase in both demand and supply, the impact on equilibrium price and quantity will depend on the magnitude of the changes.
1. An increase in both demand and supply:
- **Response:** An increase in both equilibrium price and equilibrium quantity.
- **Explanation:** The effect on price and quantity depends on the relative magnitude of the shifts. If demand increases more than supply, price may rise, and quantity will definitely increase. If supply increases more than demand, price may fall, and quantity will definitely increase.
2. An increase in demand:
- Response: An increase in both equilibrium price and equilibrium quantity.
- Explanation: An increase in demand leads to higher price and quantity in equilibrium.
3. A decrease in demand:
- Response: A decrease in both equilibrium price and equilibrium quantity.
- Explanation: A decrease in demand leads to lower price and quantity in equilibrium.
4. An increase in supply:
- Response: An increase in both equilibrium price and equilibrium quantity.
- Explanation: An increase in supply leads to lower price and higher quantity in equilibrium.
5. A decrease in equilibrium price but an increase in equilibrium quantity:
- Explanation: This scenario typically occurs when supply increases more than demand, causing a drop in price and a significant increase in quantity.
Que. Match each of the following to its results:
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An increase in both demand and supply.
An increase in demand.
A decrease in demand.
An increase in supply.
A decrease in equilibrium price but an increase in equilibrium quantity.
An increase in equilibrium quantity.
An increase in both equilibrium price and equilibrium quantity.
A decrease in both equilibrium price and equilibrium quantity.