An increase in supply causes the equilibrium price to _____ and the equilibrium quantity to _____.

Question

Quizplus · Accepted Answer

An increase in supply will result in a shift of the supply curve to the right, leading to a surplus of goods at the initial equilibrium price. In order to clear the surplus, sellers will have to lower their prices, causing the equilibrium price to fall. As there are now more goods available at a lower price, the equilibrium quantity will rise.

An Increase in Supply Causes the Equilibrium Price to _____