Question

What happens to the equilibrium price of a commodity when (a) its demand increases and supply remains the same (b) its supply increases and demand remains the same (c) its demand decreases but supply remains the same (d) it supply decreases but demand remains the same

Answer 1

Answer:

(a) equilibrium price will rise

(b) equilibrium price will fall

(c) equilibrium price will fall

(d) equilibrium price will rise

Answer 2

A commodity's equilibrium price is the price at which the amount received of the commodity is equal to its delivered amount, But increase commodity demand than supply stays the same.

Answer- (Option C)

Explanation:

• An increase in commodity demand will result in a rise in the cost of equilibrium and the amount of commodity requested and provided.
• If demand for the commodity decreases but its supply remains the same, it will result in a decrease in the price of the commodity's equilibrium and the quantity demanded and supplied.