Final answer:
The correct statement is: If supply increases and demand decreases, equilibrium price will fall. This is because the market will have a surplus of goods due to increased supply and diminished demand, leading to downward pressure on prices.
Step-by-step explanation:
The student's question pertains to how changes in supply and demand affect the equilibrium price in a market. From the options provided, the correct statement is: If supply increases and demand decreases, equilibrium price will fall. This is because an increase in supply means more of the product is available, which tends to lower the price. At the same time, a decrease in demand implies that fewer consumers want the product, which further leads to a decrease in price to clear the excess supply.
When demand increases and supply decreases, equilibrium price generally rises due to increased competition for the limited goods. If demand decreases and supply increases, we would expect the equilibrium price to fall, not rise. Finally, if supply decreases and demand remains constant, the equilibrium price typically rises because the reduced availability of the product leads to higher prices.