Final answer:
The decrease in the equilibrium price of ice cream and the increase in its equilibrium quantity likely indicates that there was an increase in the supply of ice cream, causing the supply curve to shift rightward, resulting in a lower equilibrium price and higher quantity.
Step-by-step explanation:
If the equilibrium price for ice cream decreases and the equilibrium quantity increases, the possible cause for this could be that there was an increase in the supply of ice cream. This can be explained using the basic principles of supply and demand. According to these principles, if the supply increases, it will lead to a rightward shift in the supply curve, causing a movement down the demand curve. This movement results in a lower equilibrium price and a higher equilibrium quantity, as suppliers are willing to sell more at a lower price, and consumers are willing to buy more at that lower price.
Thus, the correct answer to the student's question is:
- There was an increase in both the supply and demand for ice cream (not a suitable answer here as the demand is not mentioned to increase).
- There was an increase in the supply of ice cream (suitable answer as increasing supply alone can account for lower prices and higher quantities).
- There was a decrease in both the supply and demand for ice cream (not suitable as this would typically lead to a higher equilibrium price and a lower quantity).
- There was a decrease in the supply of ice cream and an increase in the demand (not suitable as this would usually result in a higher price).
Therefore, we can conclude that a plausible cause for the decrease in equilibrium price of ice cream and the increase in the equilibrium quantity could be an increase in the supply of ice cream.