When Supply and Demand Both Increase, the

question 384

Multiple Choice

When supply and demand both increase, the

• A) quantity definitely decreases.
• B) quantity definitely increases.
• C) price definitely increases.
• D) price definitely decreases.

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Definitions:

Adam Smith

Was an 18th-century Scottish economist and philosopher, known as the "father of modern economics" for his influential work on the nature and causes of the wealth of nations.

Economies of Scale

Cost advantages that enterprises obtain due to scale of operation, with cost per unit of output decreasing with increasing scale.

Marginal Output

Refers to the additional output that results from using one more unit of a production input, such as labor or capital, in the production process.

Total Output

The total quantity of goods and services produced in an economy during a given period.