Suppose that supply for some good increases and that simultaneously the demand for the same good decreases. The result would be

Question

Quizplus · Accepted Answer

When supply increases, it tends to lower the price (P) and increase the quantity (Q). When demand decreases, it tends to lower both the price (P) and the quantity (Q). The combined effect will definitely lower the price (P), but the change in quantity (Q) is indeterminate because the increase in supply and decrease in demand have opposing effects on quantity.

Suppose That Supply for Some Good Increases and That Simultaneously