If both supply and demand increase (shift rightward), is the change in equilibrium quantity indeterminate or ambiguous?

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justaguide | College Teacher | (Level 2) Distinguished Educator

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The supply curve which is the graph of the price of the product versus its quantity supplied is an upward sloping curve and the demand curve is a downward sloping curve.

Along the same graphs that are used initially, an increase in demand corresponds to a higher price that consumers are willing to pay, and an increase in supply corresponds to a lower price at which producers are willing to sell the product. There is no change in the equilibrium quantity per se.

If the increase in the supply and demand leads to the formation of new demand and supply curves, they intersect at a point corresponding to a new and larger equilibrium quantity; the price at this point is dependent on the actual values provided by the new curves.

The change in equilibrium quantity is not indeterminate or ambiguous. It can be estimated using the new supply/demand curves.

When both supply and demand increase, equilibrium quantity traded must rise, but the change in price depends upon the relative magnitudes of the two shifts. (Ralph Byrns. UNC, Chapel Hill)