When the demand for a commodity increases while supply remains unchanged, the equilibrium price and...
ECONOMICS
WAEC 2023
When the demand for a commodity increases while supply remains unchanged, the equilibrium price and quantity will
- A. increase
- B. remain constant
- C. decrease
- D. turn negative
Correct Answer: A. increase
Explanation
When the demand for a commodity increases while supply remains unchanged, the equilibrium price and quantity will increase. This is because the increase in demand will create a shortage at the current price. As a result, sellers will be able to raise prices, and the quantity traded will increase.
The equilibrium price will increase until the quantity demanded equals the quantity supplied. At this point, the market will be in equilibrium again.
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