Susie decided to start selling lemonade on her street.The other kids in the neighborhood noticed that Susie was making a lot of money selling lemonade.These kids decided to open their own lemonade stand.When they opened their own lemonade stand,the equilibrium price:

Question

Quizplus · Accepted Answer

The new lemonade stand opened by the other kids increased the supply in the market, which caused a surplus of lemonade. To reach a new equilibrium, the price had to decrease while the quantity of lemonade sold increased. Therefore, the price decreased (as the demand did not change) while the equilibrium quantity increased.

Susie Decided to Start Selling Lemonade on Her Street