Assume that both the demand curve and the supply curve for tablet computers shift to the right, but the supply curve shifts more than the demand curve. As a result:
A)both the equilibrium price and quantity of tablet computers will decrease.
B)the equilibrium price of tablet computers will decrease; the equilibrium quantity will increase.
C)the equilibrium price of tablet computers may increase or decrease; the equilibrium quantity will decrease.
D)the equilibrium price of tablet computers will increase; the equilibrium quantity will decrease.

Question

Quizplus · Accepted Answer

When both the demand and supply curves shift to the right, the equilibrium quantity will definitely increase. However, if the supply curve shifts more than the demand curve, the equilibrium price will decrease. This is because the increase in supply will lead to a surplus, causing suppliers to lower their prices in order to sell more tablets. Therefore, the answer is B, where the equilibrium price of tablet computers will decrease, while the equilibrium quantity will increase.

Assume That Both the Demand Curve and the Supply Curve