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15 January, 15:13

If the demand for a product increases, then we would expect equilibrium price a. and equilibrium quantity both to decrease. b. to decrease and equilibrium quantity to increase. c. to increase and equilibrium quantity to decrease. d. and equilibrium quantity both to increase.

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  1. 15 January, 17:23
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    The correct answer is option d.

    Explanation:

    In case, the demand for a commodity increases the demand curve will consequently shift rightwards. This rightward shift in the demand curve will lead to increase in the equilibrium price level as well as in the equilibrium quantity of the good.

    A decline in demand on the other hand would cause a leftward shift in the demand curve leading to a decline in both the equilibrium price as well as equilibrium quantity.
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