Equilibrium price in the peach market has stayed the same bu

Equilibrium price in the peach market has stayed the same, but equilibrium quantity has risen. Which of the following scenarios might explain this result?

I. An increase in peach supply and a perfectly elastic peach demand

II. An increase in peach supply and a perfectly inelastic peach demand

III. An increase in peach demand and a decrease in peach supply

Solution

Answer is I only.

Explanation:

Equilibrium quantiity has risen and there is no impact on equilibrium price is due to increase in supply and there is a perfect elasticity of demand as the demand will increase with slight increase in prices.