Which of the. following statements is /are true ? 1. If increase in demand and supply are of equal magnitude, the price will remain unchanged, but the equilibrium quantity will increase. 2. If increase in demand is of greater magnitude than increase in supply, both equilibrium price and equili- brium quantity will increase. 3. If increase in supply is of greater . magnitude than increase in demand, equilibrium price will fall byt equilibrium quantity will increase. Select the correct answer using the code given below:

The equilibrium price and quantity are determined by the intersection of demand and supply curves. When both curves shift rightward (increase) simultaneously, the equilibrium quantity invariably increases [2]. Statement 1 is true because if the rightward shifts are of equal magnitude, the upward pressure on price from demand is perfectly offset by the downward pressure from supply, leaving the price unchanged [2]. Statement 2 is true because a larger increase in demand relative to supply creates a net upward pressure on price while both contribute to higher quantity [3]. Statement 3 is true because a larger increase in supply relative to demand creates a net downward pressure on price, even as both shifts drive the equilibrium quantity upward [3]. Thus, the direction of price change depends entirely on the relative magnitudes of the shifts [3].

Sources

1. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 5: Market Equilibrium > Simultaneous Shifts of Demand and Supply > p. 80
2. [2] Microeconomics (NCERT class XII 2025 ed.) > Chapter 5: Market Equilibrium > Simultaneous Shifts of Demand and Supply > p. 79
3. [3] Microeconomics (NCERT class XII 2025 ed.) > Chapter 5: Market Equilibrium > 5.2.2 Price Floor > p. 86