Answer:
<em>If the demand for a good increases by more than the supply of the good increases, then the goods equilibrium price will </em><em><u>increase</u></em><em> and its equilibrium quantity will </em><em><u>also increase</u></em><em>.</em>
Explanation:
Please refer to the attachment.
D zero is the initial demand curve.
D one is the new increased demand curve.
S zero is the initial supply curve.
S one is the new increased supply curve.
P zero is the initial equilibrium price, where D zero = S zero
Q zero is the initial equilibrium quantity, where D zero = S zero
A is the initial equilibrium point, where D zero = S zero.
<em>P one is the new equilibrium price and it is greater than P zero. Here, D One is equal to S One.</em>
<em>Q one is the new equilibrium quantity and it is greater than Q zero. Here, D One is equal to S One.</em>
<em>B is the new equilibrium point, where S one is equal to D one.</em>
<u><em>Note</em></u><em>- Here, increase in demand is more than the increase in supply as seen from the diagram.</em>
