What will happen to the equilibrium in the market for a good if demand and supply increase simultaneously? a

Marketing Jan 09, 2021

What will happen to the equilibrium in the market for a good if demand and supply increase simultaneously?

a. Equilibrium quantity will always increase.

b. Equilibrium price will always decrease

c. Equilibrium quantity will always decrease.

d. Equilibrium prices will always increase.

Expert Solution

The correct option is a. Equilibrium quantity will always increase.

Explanation:

In the market, when demand and supply simultaneously increase, the demand curve and supply curve both shift rightwards, which always increases the equilibrium quantity. The rightward shift in both the curves generally leads to lower prices but this will not always be the case, as the change in price depends on how much supply and demand change.

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