When supply increases,
A) price falls and demand decreases.
B) price rises with no change in demand.
C) price rises and quantity demanded decreases.
D) price falls and quantity demanded increases.
E) demand increases so that price remains the same.

Question

Quizplus · Accepted Answer

When supply increases, it means there is more of a good or service available. This increased availability means that the price of the good or service will fall as suppliers compete for buyers. As the price falls, quantity demanded will increase, since consumers will be more likely to buy the good or service at the lower price. Therefore, the correct answer is D.

When Supply Increases