Tastes are starting to change for hybrid vehicles such that consumers are purchasing more hybrid vehicles and suppliers are choosing to produce more hybrid vehicles than they were five years ago.Due to the change in tastes,equilibrium price has fallen and equilibrium quantity has increased relative to the hybrid market from five years ago.What is the likely cause of this result?
A) Supply increased by more than demand.
B) Demand increased by more than supply.
C) Demand and supply increased by the same amount.
D) Only supply increased.

Question

Quizplus · Accepted Answer

When both supply and demand for hybrid vehicles increase, but the equilibrium price falls while the equilibrium quantity rises, it indicates that the supply has increased more than the demand. This is because an increase in supply, greater than the increase in demand, would lead to a lower price and higher quantity sold.

Tastes Are Starting to Change for Hybrid Vehicles Such That