If demand does not change,an increase in the number of sellers will cause equilibrium price to fall.

Question

Quizplus · Accepted Answer

If the number of sellers increases, the supply will increase which will shift the supply curve to the right. This will cause a surplus in the market and sellers will have to lower the price to sell off their excess goods. Eventually, the market will reach a new equilibrium with a lower price and higher quantity of goods supplied. This assumes that there is no change in demand, as an increase in demand would lead to higher prices and more sales for all sellers.

If Demand Does Not Change,an Increase in the Number of Sellers