Q6. How Is Equilibrium Price Affected When Demand Increases but Supply Remains the Same?

Answer: When demand increases but supply remains unchanged, more buyers want to purchase the same goods. This creates a shortage at the original price.

As a result:

  • Equilibrium price increases.
  • Equilibrium quantity increases.

Example: During hot weather, more people want iced tea. If shops initially have the same supply, demand rises. The price increases, and the final quantity bought and sold also increases as the market adjusts.

Remember: Demand increases + Supply unchanged → Price rises and equilibrium quantity rises.

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