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11 April, 08:59

Suppose there is an increase in demand in a market and no change in the supply. What will happen to the market equilibrium price and quantity?

A. Equilibrium price will rise; equilibrium quantity will fall

B. Equilibrium price will fall; equilibrium quantity will fall

C. Equilibrium price will fall; equilibrium quantity will rise

D. Equilibrium price will rise; equilibrium quantity will rise

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Answers (1)
  1. 11 April, 09:14
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    Option (D) is correct.

    Explanation:

    If there is an increase in the demand for a commodity and no change in the supply of the commodity then as a result there is a rightward shift in the demand curve for a commodity.

    Therefore, this rightward shift in the demand curve will increase the equilibrium price of the commodity and equilibrium quantity of the commodity in an economy.
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