Asked by labiba rabbi on Jun 19, 2024
Verified
Related to the Economics in Practice on p. 79: If the supply of generators increases and the demand for generators increases, the equilibrium price for generators ________ and the equilibrium quantity of generators ________.
A) will increase; will decrease
B) will increase; may increase, decrease, or stay the same
C) may increase, decrease, or stay the same; will increase
D) may increase; decrease, or stay the same; may increase, decrease, or stay the same
Equilibrium Price
The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to market stability.
Equilibrium Quantity
The quantity of goods or services supplied that equals the quantity demanded at the market equilibrium price.
- Gain insight into the influence of price control modifications on both demand and supply quantities.
- Comprehend the principle of equilibrium within market economics and the methods by which it is attained or changed due to external factors.
Verified Answer
AK
Angelica KaringalJun 24, 2024
Final Answer :
C
Explanation :
When both supply and demand for a product increase, the equilibrium quantity will definitely increase because there are more goods being produced and more consumers wanting to buy them. However, the effect on price is uncertain without knowing the relative magnitudes of the changes in supply and demand. If the increase in supply is larger than the increase in demand, the price could decrease. If the increase in demand is larger than the increase in supply, the price could increase. If they increase by the same amount, the price might stay the same.
Learning Objectives
- Gain insight into the influence of price control modifications on both demand and supply quantities.
- Comprehend the principle of equilibrium within market economics and the methods by which it is attained or changed due to external factors.