An increase in supply, other things being equal, will cause which of the following to occur?
A) quantity supplied to decrease.
B) quantity demanded to increase.
C) a rightward shift in the demand curve as the price falls.
D) a leftward shift in the demand curves as the price increases.

Question

Quizplus · Accepted Answer

An increase in supply, other things being equal, means that there is more of the good/service available for sale. This will lead to a decrease in the equilibrium price and an increase in the equilibrium quantity. As the price falls, quantity demanded will increase (movement along the demand curve). Therefore, choice B is the correct answer. Choice A is incorrect because an increase in supply will lead to an increase in quantity supplied. Choices C and D are incorrect because a change in supply will cause a shift along the demand curve, not a shift in the demand curve itself.

An Increase in Supply, Other Things Being Equal, Will Cause