If Demand and Supply Both Increase

question 284

Multiple Choice

If demand and supply both increase

• A) the equilibrium quantity definitely will increase and market clearing price definitely will decrease.
• B) the equilibrium quantity definitely will increase and market clearing price definitely will increase.
• C) the equilibrium quantity definitely will increase but the change in market clearing price cannot be determined without more information.
• D) market clearing price definitely will increase but the change in the equilibrium quantity cannot be determined without further information.

---

Definitions:

Fixed Fee

A set amount charged for a service or product, unrelated to usage or quantity.

Local Phone Service

A telecommunications service that connects calls within a specific geographic area, typically within a single city or region.

Absolute Values

A numerical value regardless of its sign, denoted as the distance of a number on the number line from zero.

Indifference Curve

A graphical representation showing combinations of two goods between which a consumer is indifferent, indicating equal levels of satisfaction.