What happens to equilibrium when both demand and supply increase simultaneously?

When both demand and supply increase simultaneously, the equilibrium quantity will rise, but the equilibrium price may stay the same, rise, or fall, depending on the relative shifts in demand and supply.

In economics, equilibrium refers to the point where the quantity demanded by consumers equals the quantity supplied by producers. This is the point where the demand and supply curves intersect on a graph. When both demand and supply increase, it means that consumers are willing and able to buy more of a product at the same time as producers are willing and able to produce more. This simultaneous increase will cause a rightward shift in both the demand and supply curves.

The effect on the equilibrium price, however, depends on the relative magnitudes of the shifts in demand and supply. If the increase in demand is greater than the increase in supply, the demand curve will shift more to the right than the supply curve. This will cause the equilibrium price to rise. On the other hand, if the increase in supply is greater than the increase in demand, the supply curve will shift more to the right than the demand curve. This will cause the equilibrium price to fall.

If the increases in demand and supply are equal, both curves will shift to the right by the same amount. In this case, the equilibrium price will remain the same, but the equilibrium quantity will increase. This is because at the new equilibrium point, consumers are willing and able to buy more of the product, and producers are willing and able to produce more.

In summary, when both demand and supply increase simultaneously, the equilibrium quantity will always increase. The effect on the equilibrium price, however, depends on the relative shifts in demand and supply. If the increase in demand is greater, the price will rise. If the increase in supply is greater, the price will fall. If the increases are equal, the price will stay the same.