When both the demand and supply curves shift to indicate an increase in demand and supply in the same proportion. Then: |
Only equilibrium price remains unchanged. Only equilibrium quantity remains unchanged. Equilibrium price remains unchanged but equilibrium quantity decreases. Equilibrium price remains unchanged but equilibrium quantity increases. |
Equilibrium price remains unchanged but equilibrium quantity increases. |
The correct answer is Option (4) → Equilibrium price remains unchanged but equilibrium quantity increases. When both demand and supply increase by the same proportion, the rightward shift of both curves leads to:
Hence, the price stays unchanged, but the quantity traded increases. |