2014 · Q94
Which of the following statements is/are true?
- 1If increase in demand and supply are of equal magnitude, the price will remain unchanged, but the equilibrium quantity will increase.
- 2If increase in demand is of greater magnitude than increase in supply, both equilibrium price and equilibrium quantity will increase.
- 3If increase in supply is of greater magnitude than increase in demand, equilibrium price will fall but equilibrium quantity will increase.
Select the correct answer using the code given below:
General KnowledgeIndian Economy
- A1 only
- B1 and 2 only
- C2 and 3 only
- D1, 2 and 3
Explanation
All three describe standard comparative-static shifts in equilibrium price and quantity.