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    Question

    An increase in demand for a good will cause the

    equilibrium price to ______ and the equilibrium quantity to ______. 
    A Increase; increase Correct Answer Incorrect Answer
    B Decrease; decrease Correct Answer Incorrect Answer
    C Increase; decrease Correct Answer Incorrect Answer
    D Decrease; increase Correct Answer Incorrect Answer

    Solution

    When demand increases, both the equilibrium price and the quantity of the good in the market tend to rise, as suppliers raise prices to match the higher demand.

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