The market for music lessons has experienced a change in supply and a change in demand as shown here.
The market for music lessons

What will definitely happen to the price and quantity of music lessons?

Choose 1 answer:
(A) $P$ increased
$Q$ unknown
(B) $P$ decreased
$Q$ unknown
(C) $P$ increased
$Q$ stays the same
(D) $P$ increased
$Q$ increased
(E) $Q$ increased
$P$ stays the same
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Question

The market for music lessons has experienced a change in supply and a change in demand as shown here.
The market for music lessons

What will definitely happen to the price and quantity of music lessons?

Choose 1 answer:
(A) $P$ increased
$Q$ unknown
(B) $P$ decreased
$Q$ unknown
(C) $P$ increased
$Q$ stays the same
(D) $P$ increased
$Q$ increased
(E) $Q$ increased
$P$ stays the same
Report a problem

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ To analyze the impact on price $P$ and quantity $Q$ of music lessons, we look at the shifts in supply and demand curves. ‖ ‖ step 2 ⋮ The supply curve shifts from $S1$ to $S2$, which indicates an increase in supply. ‖ ‖ step 3 ⋮ The demand curve shifts from $D1$ to $D2$, which indicates an increase in demand. ‖ ‖ step 4 ⋮ An increase in supply would tend to decrease price and increase quantity, while an increase in demand would tend to increase both price and quantity. ‖ ‖ step 5 ⋮ Since both supply and demand have increased, the effect on price $P$ is ambiguous without more information, but the quantity $Q$ of music lessons will definitely increase. ‖ ∻Answer∻ ***E*** ∻Key Concept∻ ⚹Simultaneous shifts in supply and demand⚹ ∻Explanation∻ ⚹When both supply and demand increase, the quantity traded in the market will definitely increase, but the effect on price is indeterminate without knowing the relative magnitudes of the shifts.⚹◊What are the determinants of demand and supply that could explain the changes in the music lessons market?⍭ Generate me a similar question◊

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