There are simultaneous changes in the demand for and supply of tablet devices, with the consequences being an unambiguous increase
in the equilibrium quantity of these devices but no change in the market clearing price. What changes in the demand for and supply of tablet devices could have generated these outcomes?
Part 2
A.
Demand increases and supply decreases.
B.
Demand decreases and supply increases.
C.
Demand decreases and supply decreases
.
D.
Demand increases and supply increases
.
The correct answer is D. Demand increases and supply increases.
If both demand and supply of tablet devices increase at the same time, it would lead to an unambiguous increase in the equilibrium quantity of the devices. However, since both demand and supply are increasing by the same amount, there would be no change in the market clearing price. This is because the increase in demand is matched by the increase in supply, resulting in a situation where the quantity demanded and supplied are in equilibrium at the same price.
The changes in the demand for and supply of tablet devices that could have generated an unambiguous increase in the equilibrium quantity but no change in the market clearing price are:
B. Demand decreases and supply increases.
To determine which changes in demand and supply could lead to an increase in equilibrium quantity but no change in market clearing price for tablet devices, we need to analyze each option given.
A. Demand increases and supply decreases: If demand for tablets increases, it would shift the demand curve to the right, resulting in a higher equilibrium quantity. On the other hand, if supply decreases, it would shift the supply curve to the left, leading to a higher market clearing price. Therefore, option A does not align with the given outcomes.
B. Demand decreases and supply increases: If demand for tablets decreases, it would shift the demand curve to the left, resulting in a lower equilibrium quantity. If supply increases, it would shift the supply curve to the right, leading to a lower market clearing price. Again, option B does not match the given outcomes.
C. Demand decreases and supply decreases: If both demand and supply decrease, they would shift their respective equilibrium curves to the left, resulting in a lower equilibrium quantity. This option does not explain the increase in equilibrium quantity mentioned in the question.
D. Demand increases and supply increases: If both demand and supply increase, they would shift their respective equilibrium curves to the right, resulting in a higher equilibrium quantity. However, if the changes in demand and supply are proportionate, the market clearing price may not change, leading to an increase in equilibrium quantity with no change in price. Therefore, option D aligns with the given outcomes.
In conclusion, the changes in the demand for and supply of tablet devices that could have generated an increase in equilibrium quantity but no change in the market clearing price are represented by option D: demand increases and supply increases.