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Questions and Answers
What happens to price and quantity when demand increases and supply decreases?
What happens to price and quantity when demand increases and supply decreases?
- Price increases, quantity ambiguous (correct)
- Quantity increases, price decreases
- Price and quantity both increase
- Price and quantity both decrease
In a market with elastic demand and inelastic supply, what happens when the supply increases?
In a market with elastic demand and inelastic supply, what happens when the supply increases?
- Price decreases, quantity increases (correct)
- Price and quantity both decrease
- Quantity increases, price decreases
- Price increases, quantity ambiguous
What is the likely outcome when both demand and supply increase by the same percentage?
What is the likely outcome when both demand and supply increase by the same percentage?
- Price and quantity both decrease
- Price decreases, quantity increases
- Price and quantity both increase
- Quantity increases, price ambiguous (correct)
