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