JAMB Exam > JAMB Questions > If the demand and supply for a product both i...
Start Learning for Free
If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?
- a)Price increases, quantity increases
- b)Price decreases, quantity increases
- c)Price increases, quantity remains the same
- d)Price decreases, quantity decreases
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
If the demand and supply for a product both increase, what will happen...
Explanation:
When both demand and supply increase for a product, it creates a situation where both consumers and producers are willing and able to buy and sell more of the product at various price levels. This leads to a shift in the equilibrium point where the quantity demanded and supplied intersect.
Effect on Equilibrium Price:
- When demand increases, consumers are willing to buy more of the product at each price level. This creates an upward pressure on the price because the quantity demanded exceeds the quantity supplied. As a result, the equilibrium price increases.
- When supply increases, producers are willing to sell more of the product at each price level. This creates a downward pressure on the price because the quantity supplied exceeds the quantity demanded. As a result, the equilibrium price decreases.
Since both demand and supply are increasing in this scenario, the combined effect is a greater influence on the equilibrium price. The increase in demand puts more pressure on the price to rise, while the increase in supply puts some downward pressure on the price. However, the increase in demand has a stronger effect, leading to an overall increase in the equilibrium price compared to the initial equilibrium.
Effect on Equilibrium Quantity:
- When demand increases, consumers are willing to buy more of the product at each price level. This leads to an increase in the equilibrium quantity.
- When supply increases, producers are willing to sell more of the product at each price level. This also leads to an increase in the equilibrium quantity.
Since both demand and supply are increasing in this scenario, the combined effect is an even greater influence on the equilibrium quantity. The increase in demand and supply both contribute to a higher equilibrium quantity compared to the initial equilibrium.
In conclusion, when both demand and supply increase for a product, the equilibrium price will increase and the equilibrium quantity will also increase.
When both demand and supply increase for a product, it creates a situation where both consumers and producers are willing and able to buy and sell more of the product at various price levels. This leads to a shift in the equilibrium point where the quantity demanded and supplied intersect.
Effect on Equilibrium Price:
- When demand increases, consumers are willing to buy more of the product at each price level. This creates an upward pressure on the price because the quantity demanded exceeds the quantity supplied. As a result, the equilibrium price increases.
- When supply increases, producers are willing to sell more of the product at each price level. This creates a downward pressure on the price because the quantity supplied exceeds the quantity demanded. As a result, the equilibrium price decreases.
Since both demand and supply are increasing in this scenario, the combined effect is a greater influence on the equilibrium price. The increase in demand puts more pressure on the price to rise, while the increase in supply puts some downward pressure on the price. However, the increase in demand has a stronger effect, leading to an overall increase in the equilibrium price compared to the initial equilibrium.
Effect on Equilibrium Quantity:
- When demand increases, consumers are willing to buy more of the product at each price level. This leads to an increase in the equilibrium quantity.
- When supply increases, producers are willing to sell more of the product at each price level. This also leads to an increase in the equilibrium quantity.
Since both demand and supply are increasing in this scenario, the combined effect is an even greater influence on the equilibrium quantity. The increase in demand and supply both contribute to a higher equilibrium quantity compared to the initial equilibrium.
In conclusion, when both demand and supply increase for a product, the equilibrium price will increase and the equilibrium quantity will also increase.
Free Test
FREE
| Start Free Test |
Community Answer
If the demand and supply for a product both increase, what will happen...
If the demand and supply for a product both increase, the equilibrium price will increase, but the effect on the equilibrium quantity will depend on the relative magnitude of the changes in demand and supply. When both demand and supply increase, the equilibrium quantity will increase if the increase in demand is larger than the increase in supply. However, the equilibrium quantity may remain the same or even decrease if the increase in supply is larger than the increase in demand.
|
Explore Courses for JAMB exam
|
|
Similar JAMB Doubts
Top Courses for JAMBView all
If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer?
Question Description
If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? for JAMB 2025 is part of JAMB preparation. The Question and answers have been prepared according to the JAMB exam syllabus. Information about If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for JAMB 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer?.
If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? for JAMB 2025 is part of JAMB preparation. The Question and answers have been prepared according to the JAMB exam syllabus. Information about If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for JAMB 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer?.
Solutions for If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for JAMB.
Download more important topics, notes, lectures and mock test series for JAMB Exam by signing up for free.
Here you can find the meaning of If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice If the demand and supply for a product both increase, what will happen to the equilibrium price and quantity?a)Price increases, quantity increasesb)Price decreases, quantity increasesc)Price increases, quantity remains the samed)Price decreases, quantity decreasesCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice JAMB tests.
|
|
Explore Courses for JAMB exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup