PRC-3 · Chapter 10 · Question 48 of 70
If there is a simultaneous outward shift (increase) in demand and an inward shift (decrease) in supply for a commodity, what will definitively happen to the market equilibrium?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The equilibrium price will definitely increase
Explanation
Both higher demand and lower supply put upward pressure on the price. The effect on quantity is indeterminate, but the price will unambiguously rise.
More Demand, Supply and Market Equilibrium MCQs
- Q50Which of the following variables is NOT considered a fixed precondition (ceteris paribus assumption) for the Law of Demand?
- Q51Which of the following variables is NOT considered a precondition (ceteris paribus assumption) for the Law of Supply?
- Q52During the Covid-19 pandemic, the sudden panic buying and massive need for Face Masks caused the demand curve to shift outwards. This is…
- Q53Historically, Pakistan’s power sector originally consisted of which two massive Government-owned utilities?
- Q54The Karachi Electric Supply Corporation (KESC) was officially privatized and later rebranded as K-Electric in which year?