What is the likely effect on equilibrium price and quantity when the demand for a product shifts to the right?

Show Answers

Both the equilibrium price and quantity will riseNo change will occur in equilibrium valuesEquilibrium price will rise while quantity will fallEquilibrium quantity will declineBoth the equilibrium price and quantity will fall

Explanation

Typically, when demand increases (shifts right), both equilibrium price and quantity tend to increase. Therefore, the option stating that both price and quantity decrease is incorrect.