If we observe a decrease in the price of a good and an increase in the amount of the good bought and sold, this could be explained by a(n):
A) increase in the supply of the good.
B) increase in the demand for the good.
C) decrease in the demand for the good.
D) decrease in the supply of the good.

Question

Quizplus · Accepted Answer

An increase in the supply of a good means that more of the good is available at every price. This leads to a decrease in the price of the good, as sellers are willing to accept less to sell their product, and an increase in the quantity bought and sold, as buyers are able to purchase more at lower prices.

If We Observe a Decrease in the Price of a Good