Question

What will be the effect upon equilibrium price when an increase in demand is greater than increase in supply?

विकल्प

• Equilibrium price remains unchanged

• Equilibrium price rises

• Equilibrium price falls

• None of these

Answer 1

Equilibrium price rises

Explanation:

When the increase in demand is greater than the increase in supply, the higher demand puts more upward pressure on price than the increased supply can offset. As a result, the equilibrium price rises, while the equilibrium quantity also increases.