The supply of coffee has increased twice as much as the demand for coffee has increased. As a result, we can predict a(n)

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Quizplus · Accepted Answer

When the supply of a good increases more than the demand for it, the equilibrium price typically decreases because there is more of the good available than people want to buy at the previous price. However, because there is still an increase in demand, albeit smaller than the increase in supply, the equilibrium quantity—the amount of the good that is bought and sold—increases. This is because the lower price encourages more consumption, even though the demand increase is smaller than the supply increase.

The Supply of Coffee Has Increased Twice as Much as the Demand