Question

If the supply of a product increases, then we would expect equilibrium pricea.to increase and equilibrium quantity to decrease. b.and equilibrium quantity to both decrease. c.and equilibrium quantity to both increase. d.to decrease and equilibrium quantity to increase.

Answer 1

The correct answer is option d.

Step-by-step explanation:

An increase in the supply of a product will cause the supply curve to shift to the right. This rightward shift will cause the demand curve and supply curve to intersect at a lower price.

This will cause the quantity demanded of the product to increase and the price of the product to decrease.

A decrease in the supply will cause the quantity demanded to decrease and price to increase.

The effect of supply increase is indicated through the given figure.