What will be the effect on equilibrium price and quantity of an increase in equal proportion of demand and supply of a commodity?

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Solution

Other things remaining constant when there is a proportionate increase in demand and supply. That is the rightward shift of demand curve from DD to D1D1 is equal to the rightward shift of supply from SS to S1S1 is equal then there is no change in the equilibrium price but the equilibrium quantity will increase from OQ to OQ1.

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