True or false and why
A.if the demand and supply for a product both increase ,the equilibrium quantity of the product must also increase
B. if the demand and supply for a product both increase , the equilibrium price of the product must also increase .
Economics - Financial Markets
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Reason: Both the demand and supply curves shift to the right and the equilibrium quantity increases. We can say that from common sense also. When both supply and demand increases, the quantity consumed must also increase.
Reason: The equilibrium price will depend upon the difference between the increased supply and demand quantities. If the increase in supply is more than the increase in demand, there will be an excess in the market. Consequently, the market price will fall. On the other hand, if the demand increase exceeds supply increase, the equilibrium price will rise owing to a scarcity in the market. In case, magnitudes of the increase in demand and supply are equal, the equilibrium price will remain the same.