Answer:
An increase in demand and a simultaneous decrease in supply will cause the equilibrium price to increase, while the equilibrium quantity will be ambiguous.
Step-by-step explanation:
When the demand for a product increases, consumers are willing to buy more of that product at any given price. On the other hand, when the supply of a product decreases, suppliers are willing to sell less of that product at any given price.
As a result, an increase in demand and a decrease in supply will both put upward pressure on the equilibrium price, causing it to rise. However, the effect on equilibrium quantity is ambiguous because it depends on the relative magnitudes of the shifts in demand and supply.
If the increase in demand is larger than the decrease in supply, the equilibrium quantity will increase. This is because the increase in demand will push up both the price and the quantity demanded, while the decrease in supply will reduce the quantity supplied. Conversely, if the decrease in supply is larger than the increase in demand, the equilibrium quantity will decrease. This is because the decrease in supply will push up both the price and the quantity supplied, while the increase in demand will increase the quantity demanded.