If Both Demand and Supply Increase, What Will Be the Effect

question 23

Multiple Choice

If both demand and supply increase, what will be the effect on the equilibrium price and quantity?

• A) Both the price and the quantity will increase.
• B) The quantity will increase but the price could either rise, fall, or remain the same.
• C) The price will fall but the quantity will increase.
• D) The price will rise but the quantity could either increase, decrease, or remain the same.

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Definitions:

Normal Balance

The standard side (debit or credit) on which increases to an account are recorded.

Financial Statement

Reports that summarize the financial condition and operations of a business.

Permanent/Temporary

Conceptual labels for different types of accounts in accounting, with permanent accounts being those that carry their balances into the next accounting period and temporary accounts being closed at the end of each period.