Assume the market for cell phone service is initially in equilibrium.An increase in supply would cause a surplus at the initial equilibrium price.The market adjustment would then involve a decrease in price which would in turn cause quantity demanded to increase and quantity supplied to decrease until equilibrium is reestablished.

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This statement accurately describes the process of market adjustment when there is an increase in supply in a cell phone service market. As there is now an excess of supply, suppliers may lower their prices to increase demand while consumers may also reduce their consumption leading to a decrease in quantity supplied and an increase in quantity demanded until a new equilibrium is reached.

Assume the Market for Cell Phone Service Is Initially in Equilibrium.An