Question

Suppose that for a given good demand increases and supply increases at the same time. If demand increases by a lesser amount than supply increases, then equilibrium price __________ and equilibrium quantity __________ for that good.

Answer 1

Answer: Reduce;increase

Explanation: The law of Demand states that as the price of a given Product or service is Increased, the quantity demanded by the consumers will reduce,it can also be said that if the supply of a given product rises more than the demand,the price of that product will reduce lower than the equilibrium price. As the price of a product falls below the equilibrium price level,the demand for that product will increase. CONSUMERS ARE MOVED BY THE PRICE OF GOODS AND SERVICES.