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If a rise in supply and a rise in demand occur at the same time, then we know that the price must also rise. True or False

User Jinah
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1 Answer

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Final answer:

The statement is false. The price may increase, decrease, or remain the same when there is a simultaneous rise in supply and demand.

Step-by-step explanation:

The statement is false. When there is a simultaneous rise in supply and demand, the price may increase, decrease, or remain the same, depending on the magnitude of the changes in supply and demand.

For example, if the increase in supply is greater than the increase in demand, the price may decrease. Conversely, if the increase in demand is greater than the increase in supply, the price may increase.

If the increases in supply and demand are equal, then the price may remain the same.

Therefore, a rise in supply and a rise in demand do not always lead to a rise in price.

User Asue
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