Suppose that supply increases and demand decreases.What is the MOST likely effect on price and quantity?
A)The price will increase,but quantity may increase,decrease,or stay the same.
B)The price will decrease,but quantity may increase,decrease,or stay the same.
C)The price will decrease and quantity will decrease.
D)The price will increase and quantity will increase.

Question

Quizplus · Accepted Answer

When supply increases and demand decreases, there will be an excess supply of the product in the market. This will lead to a decrease in price and the quantity will depend on the extent of the shift in supply and demand. If the increase in supply is greater than the decrease in demand, then there will be an increase in quantity. If the decrease in demand is greater than the increase in supply, then there will be a decrease in quantity. If the shift in supply and demand is equal, then quantity will remain the same. Therefore, the price will decrease, but quantity may increase, decrease, or stay the same.

Suppose That Supply Increases and Demand Decreases