Question

If the increase in demand is greater than the increase in supply, then equilibrium price will ______

Options

• Decrease

• Increase

• Remain same

• Cannot be determined

Answer 1

If the increase in demand is greater than the increase in supply, then the equilibrium price will increase.

Explanation:

When demand and supply both grow, but demand grows faster than supply, the equilibrium price rises and the equilibrium quantity rises as well.