-In Figure1.1 if supply increases, then equilibrium:
A)price and quantity fall.
B)price and quantity rise.
C)price rises and quantity falls.
D)price falls and quantity rises.

Question

-In Figure1.1 if supply increases, then equilibrium:
A)price and quantity fall. 
B)price and quantity rise. 
C)price rises and quantity falls. 
D)price falls and quantity rises.

Quizplus · Accepted Answer

When supply increases, the supply curve shifts to the right, leading to a lower equilibrium price and a higher equilibrium quantity. This is because the increased supply creates a surplus at the original price, which puts downward pressure on the price until the surplus is eliminated by the increased quantity demanded at the lower price.

-In Figure1.1 If Supply Increases, Then Equilibrium