Suppose a market experiences an "Increase in Supply", while the Demand Curve remains constant. Predict the correct changes in the equilibrium price and equilibrium quantity that are produced by the "increase in supply":
A) The Equilibrium Price remains constant, and the Equilibrium Quantity Increases.
B) The Equilibrium Price increases, and the Equilibrium Quantity Increases.
C) The Equilibrium Quantity remains constant, and the Equilibrium Price increases.
D) The Equilibrium Quantity increases, and the Equilibrium Price decreases.
E) The Equilibrium Quantity decreases, and the Equilibrium Price increases.

Question

Quizplus · Accepted Answer

Ceteris paribus, an increase in supply causes an increase in equilibirum quantity and a decrease in equilibirum price.

Suppose a Market Experiences an "Increase in Supply", While the Demand