The demand curve moves to the right as the supply curve also moves to the right (at the same time), then: a

Marketing Jan 09, 2021

The demand curve moves to the right as the supply curve also moves to the right (at the same time), then:

a. Equilibrium price must increase but equilibrium quantity may either rise, fall or remain unchanged,

b. Equilibrium price and quantity must both go down,

c. The equilibrium price may either rise, fall, or remain unchanged but the equilibrium quantity must increase,

d. None of the above.

Expert Solution

The correct answer is: c). Equilibrium price may either rise, fall, or remain unchanged but the equilibrium quantity must increase.

In both supply and demand curves shift to the right, price may increase, decrease or remain the same, while quantity must increase. This will be determine by how further they two curves will shift.

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