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How does an increase in both supply and demand affect equilibrium price and quanitity?

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Assume that the market for radios is perfectly competitive and there is a simultaneous increase in supply and demand. What can be said about the new equilibrium relative to the one before the shifts in supply and demand occurred?

A. An increase in equilibrium price and quantity

B. A decrease in equilibrium price and quantity

C. An increase in equilibrium quantity and uncertain effect on equilibrium price

D. A decrease in equilibrium price and increase in equilibrium quantity

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Solution Summary

This solution briefly describes the effects of the change. Supply and demand affect equilibrium price and quantity is examined.

Solution provided by:
Edwin Sinclar, MBA
Education
  • MBA, Aspen University
  • Bachelor of Science , Berea College
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