Consider a market that is in equilibrium. If the market experiences an increase in supply:
A) the equilibrium price and quantity will rise.
B) the equilibrium price will fall and the equilibrium quantity will rise.
C) the equilibrium price and quantity will fall.
D) the equilibrium price will rise and the equilibrium quantity will fall.

Question

Quizplus · Accepted Answer

When there is an increase in supply, there will be a shift in the supply curve to the right. This will cause the equilibrium price to go down and the equilibrium quantity to go up, resulting in a new equilibrium at a lower price but a higher quantity.

Consider a Market That Is in Equilibrium