Question

In the market for online tutoring, there is an increase in the supply of online tutors during finals week, but there is an even larger increase in the demand for online tutors. These events will cause the equilibrium price of online tutoring to _____ and the equilibrium quantity to _____.

Answer 1

Answer:

The correct answer is: increase; increase.

Explanation:

Suppose in the market for online tutoring, there is an increase in the supply of online tutors during the final week. This will cause the supply curve to shift to the right. At the same time, the demand for online tutors increases more than supply. This will cause a rightward shift in the demand curve as well.  

The rightward shift in both curves will cause the equilibrium quantity to increase. Since the increase in demand is greater than the increase in supply, the equilibrium price will increase as well.