Question

Suppose there is an increase in both the supply and demand for personal computers. In the market for personal computers, we would expect the
a. equilibrium quantity to rise and the equilibrium price to rise.
b. equilibrium quantity to rise and the equilibrium price to fall.
c. equilibrium quantity to rise and the equilibrium price to remain constant.
d. equilibrium quantity to rise and the change in the equilibrium price to be ambiguous.
e. change in the equilibrium quantity to be ambiguous and the equilibrium to rise.

Answer 1

Answer:

The correct answer is letter "B": equilibrium quantity to rise and the equilibrium price to fall.

Explanation:

Given the market for a certain product, in case both the demand and supply of that good increase, as the demand increases, the equilibrium quantity is likely to increase. Every time the equilibrium quantity increases, the equilibrium price tends to fall.