question archive If the increase in demand is larger than the increase in supply, what happens to the equilibrium price and output sales?

If the increase in demand is larger than the increase in supply, what happens to the equilibrium price and output sales?

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If the increase in demand is larger than the increase in supply, what happens to the equilibrium price and output sales?

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If the increase in demand is larger than the increase in supply, both price and quantity rise. If both demand and supply rise, the quantity will always rise. The change in price depends on which of the two is relatively larger. This is because increased demand raises prices while increased supply lowers prices.