identify how the described changes will affect equilibrium price and equilibrium quantity
-Widgets and Wadgets are considered substitute goods in the market for accessories.The price of Widgets falls at the same time there is an increase of suppliers of Wadgets.

Question

Quizplus · Accepted Answer

The decrease in the price of Widgets (a substitute for Wadgets) would normally lead to a decrease in the demand for Wadgets, potentially lowering their equilibrium price and quantity. However, an increase in the number of suppliers of Wadgets increases the supply, which could lower the price further but increase the quantity. The net effect on price is indeterminate because the demand and supply shifts have opposing effects on price, but the quantity increases due to the increased supply.

Identify How the Described Changes Will Affect Equilibrium Price and Equilibrium