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Question
When demand and supply both increase, the equilibrium price
When demand and supply both increase, the equilibrium price
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Solution
The correct option is D is ambiguous
If the increase in demand is more than the increase in supply, the equilibrium price increases. If the increase in demand is less than the increase in supply, the equilibrium price decreases. In both cases, equilibrium quantity increases.
If the increase in demand is more than the increase in supply, the equilibrium price increases. If the increase in demand is less than the increase in supply, the equilibrium price decreases. In both cases, equilibrium quantity increases.
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