What is the effect on price when both demand and supply increase significantly?

When both demand and supply increase significantly, the effect on price is uncertain due to the interplay of the two factors. If demand increases, consumers are willing to purchase more goods, which tends to drive prices up. Conversely, if supply increases, producers are willing to sell more goods, which generally puts downward pressure on prices.

The net effect on price depends on the relative magnitudes of the shifts in demand and supply. If the increase in demand is greater than the increase in supply, prices are likely to rise. However, if the supply increases more than the demand, prices are likely to fall. If both increase proportionally, the price may remain stable. Therefore, without specific information about the exact changes in demand and supply, one cannot definitively conclude what will happen to the price, making it uncertain.