When both the demand and supply curves shift to indicate an increase in demand and supply in the same proportion. Then:
Answer & explanation
Correct answer: option 4
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:
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Equilibrium price staying the same, because the increase in demand is exactly matched by the increase in supply.
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Equilibrium quantity increasing, since more of the good is both demanded and supplied at the same price.
Hence, the price stays unchanged, but the quantity traded increases.