If demand decreases while supply increases for a particular good:

Question

Quizplus · Accepted Answer

If demand decreases while supply increases, there will be an excess supply of the good which will put pressure on the suppliers to lower the price in order to clear the market. Hence, the equilibrium price of the good will decrease while the quantity of the good produced and sold could increase, decrease, or remain constant depending on the extent of the changes in demand and supply. When demand decreases while supply increases, there is an oversupply of the good in the market. This leads to a surplus and a decrease in price to encourage consumers to buy more of the good. However, the quantity of the good produced and sold could increase, decrease, or remain constant depending on how much the decrease in demand and increase in supply offset each other.

If Demand Decreases While Supply Increases for a Particular Good