What is the typical effect on the market when there is an increase in demand?

Show Answers

An increase in both the equilibrium price and quantity suppliedA decrease in equilibrium price accompanied by a rise in quantity suppliedA decline in both equilibrium price and quantity suppliedAn increase in equilibrium price with a reduction in quantity supplied

Explanation

When demand rises, it generally causes both the equilibrium price and the quantity produced to increase, as sellers respond to higher demand by supplying more at a higher price.