A large increase in the supply of HD-TV sets occurs simultaneously with a smaller decrease in its demand. As a result, the equilibrium price will

Question

Quizplus · Accepted Answer

When the supply of a good increases while its demand decreases, the equilibrium price will decrease, while the change in equilibrium quantity will depend on the magnitude of the two changes. In this case, the increase in supply is larger in magnitude than the decrease in demand, which suggests that the equilibrium quantity will increase. Therefore, the correct answer is D: decrease in price and increase in quantity.

A Large Increase in the Supply of HD-TV Sets Occurs