Answer to Question #149808 in Microeconomics for NNANYANE PATIENCE

Question

''Economic growth requires reliable electricity supply.President Cyril Ramaphosa has been on a campaign to bring investment in the country meaning there is bound to be an increase in the demand of electricity''
use a diagram to illustrate what will happen to the equilibrium price and quantity of a product if the demand for the product increases as well as supply increases .three factors that can cause an increase in demand.

Answer 1

Increase in demand and increase in supply curves.

An increase in demand will cause the equilibrium price to rise resulting to an increase in quantity supplied.

An increase in supply will result to the equilibrium price to lower increasing the quantity of good demanded.

Three factors that cause an increase in demand are;

a)the number of buyers in the market

b)changes in price of related goods

c)tastes and preferences of the consumers.