The correct answer is Option (1) → (A)-(IV), (B)-(III), (C)-(II), (D)-(I)
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(A) Increase in demand > Increase in supply: When demand increases by a greater amount than supply, the upward pressure on price from demand outweighs the downward pressure from supply. Both shifts increase quantity. This results in (IV) equilibrium price and quantity will rise.
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(B) Increase in supply when demand is perfectly inelastic: A perfectly inelastic demand curve is vertical, meaning the quantity demanded does not change regardless of price. An increase in supply will only cause a fall in price, with no change in quantity. This results in (III) equilibrium price will fall but no change in equilibrium quantity.
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(C) Same proportion of increase in demand and supply: When both curves shift to the right by the same amount, the upward pressure on price from the demand shift is perfectly offset by the downward pressure from the supply shift, keeping the price constant. Both shifts increase quantity. This results in (II) No change in equilibrium price.
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(D) Increase in demand when supply is perfectly inelastic: A perfectly inelastic supply curve is vertical, meaning the quantity supplied does not change regardless of price. An increase in demand will only cause a rise in price, with no change in quantity. This results in (I) equilibrium price will rise but no change in equilibrium quantity.
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