if the demand and supply curves increase (shift outward) by identical proportions then\na. equilibrium price…

if the demand and supply curves increase (shift outward) by identical proportions then\na. equilibrium price stays the same and quantity rises.\nb. equilibrium price and quantity do not change.\nc. equilibrium price and quantity both increase.\nd. equilibrium price increases but quantity falls.\nwhat if the increase in demand were larger than the increase in supply?\na. the equilibrium price decreases and the quantity increases.\nb. the equilibrium price and quantity increase.\nc. the equilibrium price increases and the quantity decreases.\nd. the equilibrium price and quantity decrease.\nwhat if the increase in demand were smaller than the increase in supply?\na. equilibrium price rises and quantity falls.\nb. equilibrium price and quantity both rise.\nc. equilibrium price and quantity both fall.\nd. equilibrium price falls and quantity rises.

if the demand and supply curves increase (shift outward) by identical proportions then\na. equilibrium price stays the same and quantity rises.\nb. equilibrium price and quantity do not change.\nc. equilibrium price and quantity both increase.\nd. equilibrium price increases but quantity falls.\nwhat if the increase in demand were larger than the increase in supply?\na. the equilibrium price decreases and the quantity increases.\nb. the equilibrium price and quantity increase.\nc. the equilibrium price increases and the quantity decreases.\nd. the equilibrium price and quantity decrease.\nwhat if the increase in demand were smaller than the increase in supply?\na. equilibrium price rises and quantity falls.\nb. equilibrium price and quantity both rise.\nc. equilibrium price and quantity both fall.\nd. equilibrium price falls and quantity rises.

Answer

Brief Explanations:

  1. When demand and supply curves increase by identical proportions, the shift in demand is matched by the shift in supply. So, the equilibrium price remains the same as the forces pulling the price up (due to demand) and down (due to supply) balance out, and quantity rises as both demand and supply have increased.
  2. When the increase in demand is larger than the increase in supply, the upward - pressure on price from the greater increase in demand dominates, and both equilibrium price and quantity increase as the new equilibrium is at a higher price and quantity level.
  3. When the increase in demand is smaller than the increase in supply, the downward - pressure on price from the greater increase in supply dominates. So, the equilibrium price falls and the quantity rises as the new equilibrium is at a lower price and higher quantity level.

Answer:

  1. A. equilibrium price stays the same and quantity rises.
  2. B. The equilibrium price and quantity increase.
  3. D. Equilibrium price falls and quantity rises.