Which of the following is true?

If increase in demand is equal to increase in supply, price will remain same

The correct answer is Option 2: If increase in demand is equal to increase in supply, price will remain same

• If increase in supply is more than increase in demand, equilibrium quantity falls: This is false. If supply increases more than demand, the equilibrium quantity will increase, not fall. The excess supply will push prices down, leading to more transactions.

• If increase in demand is equal to increase in supply, price will remain same: This is true. If both demand and supply increase by the same magnitude, the equilibrium quantity increases, but the price remains unchanged since the shifts balance each other out.

• If increase in supply is less than decrease in demand, equilibrium price rises: This is false. If demand falls more than supply increases, there will be excess supply, leading to a fall in price, not a rise.

• If decrease in demand is less than decrease in supply, price falls: This is false. If supply decreases more than demand decreases, the reduced availability of goods will push prices up, not down.