Suppose it is observed in a market that price has fallen but more product is being produced and sold. This could be caused by a(n)
A)decrease in supply and demand.
B)decrease in demand.
C)decrease in supply.
D)increase in supply.
E)increase in demand.

Question

Quizplus · Accepted Answer

When the price has fallen but more product is being produced and sold, it suggests that there has been an increase in supply. If there was a decrease in supply, prices would more likely have risen. If there was a decrease in demand, production would have decreased and prices would have fallen further.

Suppose It Is Observed in a Market That Price Has