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The equilibrium price of a commodity will definitely rise if there is a/an :
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- increase in supply combined with a decrease in demand.
- increase in both demand and supply.
- decrease in both demand and supply.
- increase in demand accompanied by a decrease in supply.
- increase in supply combined with a decrease in demand.
Correct Option: D
Price of a commodity is always determined by the forces of demand and supply in the market. The price at which the amount demanded and amount supplied are equal is known as ‘equilibrium price.’ The equilibrium price definitely increases when there is an increase in demand combined with the decrease in supply.
