What happens to equilibrium quantity and price if government
What happens to equilibrium quantity and price if government builds new roads for only motorcycles to provide a faster transportation. Supply shifts to the right; price declines, quantity increase. Both supply and demand shift to the right; quantity rises, price is indeterminate. Demand shifts to the right, both price and quantity rise Demand shifts to the left; both price and quantity rise.
Solution
If we analyse through given options option C is logically correct. Demand will shift to right as more motor cycles will use these new roads to avoid congestions hence preferences / tastes will change which will shift demand curve rightwards.
And supply will be constant
Hence Price and Quantity both will increase.
Option C is correct
