Question

For a downard-sloping demand curve, a rightward shift of the supply curve:

a. decreases equilibrium price and increases equilibrium quantity.
b. has no impact on the equilimbrium price and quantity
c. increases both price and equilibrium quantity.
d. increases equilibrium price and decreases equilibrium quantity
e. decreases both price and equilibrium quantity.

Answer 1

A rightward shift in the supply curve leads to a decrease in equilibrium price and an increase in equilibrium quantity, in accordance with the law of supply and demand.

"The correct option is approximately option A"

Step-by-step explanation:

For a downward-sloping demand curve, a rightward shift in the supply curve indicates an increase in supply. According to basic economic principles, when the supply of a product increases, and the demand remains unchanged, it typically leads to a lower equilibrium price, because sellers are willing to accept less to sell the additional supply.

At the same time, the equilibrium quantity of the product sold will increase, as consumers will be inclined to purchase more of the product at its lower price. Therefore, among the given options, a rightward shift of the supply curve:

• Decreases equilibrium price and increases equilibrium quantity.

This outcome reflects the law of supply and demand, demonstrating the inverse relationship between the price of an item and the quantity supplied. The effect of such a shift on equilibrium price and quantity is central to market analyses.