Choice "B" is correct. When the supply of and demand for a good both increase, equilibrium quantity increases. However, the impact on price is indeterminate. If demand and supply increase by the same amount, price will remain unchanged (as illustrated above). However, if demand increases by more than supply, price will increase. Conversely, if supply increases by more than demand, price will decrease.Choices "d" and "c" are incorrect, since the impact on price is indeterminate.
Choice "a" is incorrect, since equilibrium quantity will increase.
